TEST BANK for Fundamentals of Management (Canadian Edition) 9th Edition by Robbins, DeCenzo, Coulter

Fundamentals of Management, 9e (Robbins) Chapter 1 Managers and Management 1) Part of what defines an organization is its purpose.

Answer: TRUE Explanation: The goals or purpose of an organization define the organization's reason for existing. Without a common purpose, a group of individuals does not qualify as an organization.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 2) All organizations have a structure that in some ways serves to define and limit the behavior of members of the organization.

Answer: TRUE Explanation: The structure of an organization, whether formal or informal, defines how organization members interact. For example, a school's informal guidelines might determine how teachers fraternize. A school's formal guidelines might set up rules for interaction between students and teachers.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 3) In order to be considered a manager, an individual must direct or oversee the work of others.

Answer: TRUE Explanation: Directing and overseeing work distinguishes managers from nonmanagerial employees. Managers direct and oversee work of others.

Nonmanagerial employees have no supervisory responsibilities.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 4) A manager does not work directly on tasks for the organization.

Answer: FALSE Explanation: Managers may work on tasks in addition to their supervisory duties. For example, a manager of a shop that designs clothing may also create designs on his or her own.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

5) Supervisors and team leaders may both be considered first-line managers.

Answer: TRUE Explanation: First-line managers are managers who oversee workers directly and are involved in day-to-day operations. For example, a team manager in an auto assembly plant might oversee and help solve everyday problems that arise on the assembly line.

Higher-level managers typically would not spend time helping to solve assembly line problems directly.

Diff: 1 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 6) Effectiveness refers to the relationship between inputs and outputs.

Answer: FALSE Explanation: Efficiency is concerned with maximizing the output-to-input ratio.

Effectiveness, on the other hand, refers not to how well resources are used but to which resources to use, and whether or not those resources help the organization attain its goals.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 7) A goal of efficiency is to minimize output costs while maximizing input costs.

Answer: FALSE Explanation: The goal of efficiency is the opposite—to maximize outputs while minimizing inputs. An efficient operation uses the fewest resources to generate the greatest amount of product.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 8) Effectiveness refers to the attainment of the organization's goals.

Answer: TRUE Explanation: Effectiveness is concerned with "doing the right things"—choosing the tasks that will help the organization achieve its goals. Efficiency, on the other hand, refers to "doing things right," that is, once tasks are chosen they are done with a minimum of waste.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

9) Managers who are effective at meeting organizational goals always act efficiently.

Answer: FALSE Explanation: A manager may be effective but not efficient. For example, a manager may excel at achieving goals but waste a lot of money, energy, and resources in achieving them.

Diff: 3 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 10) The four contemporary management processes are planning, organizing, leading, and commanding.

Answer: FALSE Explanation: Leading is a term that replaced commanding and coordinating. So commanding is considered to be part of leading and not distinct from it.

Diff: 1 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 31) Which of the following is the most accurate statement regarding managers in today's world?

A) There is a greater need for customer focus than ever before.

B) Managers are found almost exclusively in large corporations that have more than 500 employees.

C) Managers are found almost exclusively in for-profit organizations.

D) More than half of today's managers are women.

Answer: A Explanation: A) Organizations need customers. Without them, most organizations would cease to exist. Yet, focusing on the customer has long been thought to be the responsibility of marketing people. "Let the marketers worry about the customers" is how many managers felt. We're discovering, however, that employee attitudes and behaviors play a big role in customer satisfaction.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

32) An organization is ________.

A) the physical location where people work B) any collection of people who perform similar tasks C) a deliberate arrangement of people to accomplish some specific purpose D) a group of individuals focused on profit-making for their shareholders Answer: C Explanation: C) By definition, an organization is a deliberate arrangement of people who have a common purpose or goal. An organization may or may not exist in a discrete physical location. For example, many of today's political advocacy organizations exist largely as online entities without a primary physical location.

Though some people in an organization may perform similar tasks, many do not. For example, doctors and administrators may both work for the same hospital organization but perform very different tasks. Finally, focus on profit does not determine an organization. Many organizations, such as a bird-watching club, do not include profit as a goal.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 33) All organizations have ________ that define(s) the organization's purpose and reason for existing.

A) limits B) rules C) structure D) goals Answer: D Explanation: D) An organization's goals define its purpose and reason for existing.

For example, the goals of a bank might be to make money, while the goals of a church choir might to be to create beautiful music. Rules can help an organization achieve its goals, but rules do not explicitly define those goals. Organizational structure defines and limits how people within an organization interact, but structure on its own is not something that serves to define an organization's purpose.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

34) One of the common characteristics of all organizations is ________ that define(s) rules, regulations, and values of the organization.

A) a set of written bylaws B) an explicit goal C) a systematic structure D) a stated purpose Answer: C Explanation: C) An organization's structure identifies organizational values that include behavioral standards, customs, ethical mores, and conventions that delineate relationships between organization members. The structure of an organization need not be formally written as bylaws. The goals and purpose of an organization can influence its values, but neither of these items can be said to define an organization's values.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 35) A fraternity is an example of an organization because it is comprised of people who ________.

A) share the same values, traditions, and customs B) share the same goals and values C) share goals and function within a common structure D) function under the same set of rules and regulations Answer: C Explanation: C) Members of an organization must not only share the same goals, they must all work within a common structure to attain those goals. To grasp this distinction, compare two baseball players on different teams: both may share the same goal of winning the World Series, but they belong to different organizations.

Similarly, simply sharing values or rules is not sufficient to identify or differentiate an organization. To make up an organization, people need to belong to a shared structure or institution and have common goals.

Diff: 2 AACSB: Analytic thinking Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

36) Which of the following is a key difference between managerial and nonmanagerial employees?

A) Managerial employees receive higher pay compensation.

B) Nonmanagerial employees have less formal education.

C) Nonmanagerial employees do not oversee the work of others.

D) Managerial employees work longer hours.

Answer: C Explanation: C) The distinction between managerial and nonmanagerial employees resides solely in overseeing work. Managers have the responsibility of supervising and directing work of others. Nonmanagerial employees do not have this responsibility. Managers may or may not receive better compensation, have more education, or work longer hours than nonmanagers—so none of these criteria can serve to distinguish between the two.

Diff: 1 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 37) The primary job of a manager is to ________.

A) make decisions that help an organization grow B) tackle tasks that are too difficult for nonmanagerial employees C) coordinate between organization leaders and ordinary employees D) direct and oversee the work of others Answer: D Explanation: D) Though managers may make important decisions, tackle difficult tasks, or coordinate between leaders and lower-level employees, a manager's primary job is to supervise the work of others. The supervisory role is what distinguishes managers from nonmanagers.

Diff: 1 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 38) The work of a manager ________.

A) is strictly limited to overseeing and monitoring the work of others B) may involve performing tasks that are not related to overseeing others C) involves only high-level tasks that require a sophisticated skill set D) does not involve interaction with nonmanagerial employees Answer: B Explanation: B) The primary job of a manager is to oversee work of others. However, this does not preclude a manager from performing tasks on his or her own that do not involve supervision of others. An example of a manager not being limited to supervising would be an art director at a book company who supervises work of others but also creates artworks on her own. Tasks performed by managers are not necessarily high level and may involve interaction with nonmanagerial workers, so neither of these choices is correct.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

39) Supervisor is another name for which of the following?

A) team leader B) middle manager C) first-line manager D) top manager Answer: C Explanation: C) An organization's management hierarchy typically follows this progression: first-line manager, middle manager or team leader, and top manager. This sequence usually reflects the degree to which managers are involved in planning and making higher-order decisions. The lowest position in the sequence, the first-line manager, is generally more involved in supervising others than making higher-order decisions, so this individual is often termed a supervisor. Managers higher in the chain of command do less supervising than first-line managers so they are less likely to be called a supervisor.

Diff: 1 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 40) Which of the following types of managers is responsible for making organizationwide decisions and establishing the plans and goals that affect the entire organization?

A) team leader B) top manager C) department head D) project leader Answer: B Explanation: B) In a typical management hierarchy, the individuals responsible for making higher-order decisions that involve planning, goals, policy, and philosophy are the top managers. Team leaders are generally first-line managers at the bottom of the hierarchy who are least involved with higher-order goals. Department heads and project leaders are titles for middle managers who are more involved with the implementation rather than the making of goals and policy.

Diff: 1 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

41) Which is an important job responsibility for a middle manager?

A) defining the organization's long-term goals B) translating goals defined by top managers into action C) helping top managers define goals D) performing tasks that are not related to long-term goals Answer: B Explanation: B) In an organization, top management typically defines long-term goals, then enlists middle managers to find ways to achieve those goals. Thus, middle managers are not involved in identifying long-term goals in any way. The job of a middle manager is very involved with long-term goals, it just doesn't involve defining those goals.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 42) Which of the following identifies a manager who does NOT typically supervise other managers?

A) unit chief B) shift manager C) vice president D) division manager Answer: B Explanation: B) All but first-line managers are responsible at least in part for overseeing the work of other managers. The shift manager is the only first-line manager in this group. A unit chief and division manager are both titles for middle managers who oversee other managers. A vice president is a top management position that is usually heavily involved with the management of other managers.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

43) Of the following, which is the lowest level of management?

A) a nonmanagerial employee B) an individual involved in defining the organization's philosophy C) a vice president D) a middle manager Answer: D Explanation: D) The middle manager represents the lowest managerial position among the choices given here, but it is not the lowest position in the managerial hierarchy. Individuals who rank above a middle manager include a vice president and an individual who defines organizational philosophy, both of whom would qualify as top managers. Finally, a nonmanagerial employee is lowest in the hierarchy among these choices, but this individual is not a part of management.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 44) All levels of management between the supervisory level and the top level of the organization are termed ________.

A) middle managers B) first-line managers C) supervisors D) team leaders Answer: A Explanation: A) Middle management is defined as those individuals who are between top management and the team leaders, supervisors, and other first-line managers who make up the supervisory level of management. Any manager who is (1) not a part of top management and (2) not primarily a supervisor of nonmanagerial employees is classified as a middle manager.

Diff: 2 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

45) Which of the following levels of management is associated with positions such as executive vice president, chief operating officer, chief executive officer, and chairperson of the board?

A) team leaders B) middle managers C) first-line managers D) top managers Answer: D Explanation: D) All of the titles listed above—executive vice president, chief operating officer, chief executive officer, and chairperson of the board—are executive positions that are typically part of an organization's top management. Team leaders are types of first-line managers and are not part of top management. Any positions that include executive as part of the title would eliminate middle managers as a choice.

Diff: 1 Objective: 1.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 46) Another term for efficiency is ________.

A) doing the right things B) doing things right C) making sure things get done D) doing things at the right time Answer: B Explanation: B) Efficiency is often termed doing things right because the phrase denotes the manner in which tasks are carried out. The "right" way or efficient way correlates with a minimum of wasted time, money, energy, and resources. "Doing the right things," on the other hand, refers to effectiveness, not efficiency. Making sure that things get done and doing things at the right time are both often part of an efficient undertaking, but neither effort could be said to define efficiency.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

47) Which of the following might be an example of increased efficiency in manufacturing?

A) cutting the amount of labor required to make the product B) cutting the price of the product C) increasing sales of the product D) increasing advertising for the product Answer: A Explanation: A) Efficiency must involve reducing the input-to-output ratio in some way. Cutting the amount of labor reduces the amount of input and so marks an increase in efficiency. Cutting the price does not affect the amount of resources and labor that go into the product, nor does it improve the product itself, so it is not an efficiency measure. Increasing sales and advertising similarly do not change the inputoutput ratio so they do not increase efficiency.

Diff: 3 AACSB: Analytic thinking Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 48) Another term for effectiveness is ________.

A) doing the right things B) doing things right C) doing things intelligently D) doing things when necessary Answer: A Explanation: A) Effectiveness is said to be "doing the right things" because effectiveness is concerned with obtaining results and reaching goals. Doing things "in the right way" results in efficiency rather than effectiveness. Note that an enterprise can be effective—i.e., it can attain goals—without being efficient in such areas as keeping costs and resources down. Doing things intelligently is clearly part of an effective effort without being critical to it. The same can be said of doing things when necessary—it is not a critical part of an effective effort.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

49) Effectiveness is synonymous with ________.

A) cost minimization B) smart management C) goal attainment D) efficiency Answer: C Explanation: C) Effectiveness is concerned with ends as opposed to means. Being effective means "getting the job done" (attaining goals), while being efficient is concerned with "how the job got done" and such things as cost minimization. While effective operations usually feature smart management, the two are not necessarily synonymous.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 50) Efficiency refers to ________.

A) the relationship between inputs and outputs B) the additive relationship between inputs and outputs C) the inverse relationship between inputs and outputs D) decreasing inputs only Answer: A Explanation: A) Mathematically, efficiency is measured as a ratio of inputs to outputs. For example, in physics the ratio of input energy to output energy defines a machine's efficiency. The same principles apply to management. Efficiency is measured as the ratio of input energy, or other resources such as costs or labor, to the amount of product or output created. The input-output ratio is neither additive nor inverse but rather directly proportional in some way. Finally, though decreasing inputs can increase efficiency, it is not the only way to increase efficiency.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 51) Good management strives for ________.

A) low efficiency and high effectiveness B) high efficiency and low effectiveness C) high efficiency and high effectiveness D) moderate efficiency and moderate effectiveness Answer: C Explanation: C) High efficiency and high effectiveness are both things that managers seek to obtain. High efficiency is associated with minimal waste and a maximum of production. High effectiveness is associated with success in achieving goals. Low or moderate measures of efficiency or effectiveness are clearly inferior to a high amount of each quality.

Diff: 2 Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

52) A candy manufacturer would increase both efficiency and effectiveness by making ________.

A) better candy at the same cost B) better candy at a lower cost C) the same candy at a lower cost D) the same candy at the same cost Answer: B Explanation: B) Increasing efficiency involves making the product at lower cost.

Increasing effectiveness means making a better product. So increasing efficiency and effectiveness would entail making a better product at a lower cost. Any other combination of the two variables—not improving the cost or the quality of the candy —would not be an improvement in both efficiency and effectiveness.

Diff: 3 AACSB: Analytic thinking Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 53) A candy manufacturer that made candy at a lower cost without improving the quality of the candy could be said to ________.

A) increase effectiveness without increasing efficiency B) increase efficiency without increasing effectiveness C) increase both effectiveness and efficiency D) decrease both effectiveness and efficiency Answer: B Explanation: B) Lowering cost is a measure of increased efficiency. Making better candy is a measure of increased effectiveness. So lowering cost for unimproved candy shows an increase in efficiency but not effectiveness.

Diff: 3 AACSB: Analytic thinking Objective: 1.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 54) The "father" of scientific management was ________.

A) Henri Fayol B) Robert L. Katz C) Henry Mintzberg D) Frederick Winslow Taylor Answer: D Explanation: D) Fayol worked about the same time period as Taylor and was also fairly "scientific" in his approach. However, Taylor was the person who stressed being "scientific" and coined the term scientific management in his 1911 book. Mintzberg and Katz also contributed to ideas about scientific management, but both of these thinkers came later.

Diff: 2 Objective: 1.2 Learning Outcome: Summarize the major historical and current approaches to management

55) Taylor began to develop his theory of ________ after a result of viewing workers in steel companies.

A) the functions of management B) ethics-based management C) management skills D) scientific management Answer: D Explanation: D) Taylor's scientific management theory posited that efficiency in organizations could be improved by studying organizations objectively and systematically. The functions of management were developed by Fayol. Management skills were identified by Katz. Ethics-based management is not a known theory of management.

Diff: 2 AACSB: Use of information technology Objective: 1.2 Learning Outcome: Summarize the major historical and current approaches to management 56) A major contribution that Taylor made to the study of management was ________.

A) to measure efficiency on a 4-star scale B) to identify the one best way to get a job done C) to identify the three best ways to get a job done D) to measure inefficiency on a 4-star scale Answer: B Explanation: B) Taylor measured efficiency and inefficiency, but he did not rank them on a star scale. What Taylor did do was collect data to identify the "one best way" to do a job; that is, the most efficient and effective way to complete a task.

Taylor focused on only a single best way.

Diff: 2 AACSB: Use of information technology Objective: 1.2 Learning Outcome: Summarize the major historical and current approaches to management

57) Which of the following did Taylor NOT find "appalling" in his study of workers in steel companies?

A) Workers "took it easy" on the job.

B) Workers employed different techniques for the same job.

C) Workers would only attempt to perform a job if they were shown to have aptitude for it.

D) Worker output was only about one-third of what was possible.

Answer: C Explanation: C) Taylor indeed discovered that workers did not work hard on the job, did not have standardized methods and techniques for completing a task, and only accomplished a fraction of their theoretical work potential. All of the above dismayed Taylor greatly, convincing him that the situation could be greatly improved with the application of standardized work rules and task methodology. The one thing in the list that Taylor did not discover was workers who refused to work at jobs they did not have aptitude for. In fact, he found that the reverse situation existed—workers performed jobs that they had no aptitude for—this constituted yet another practice that was appalling to Taylor.

Diff: 3 AACSB: Use of information technology Objective: 1.2 Learning Outcome: Summarize the major historical and current approaches to management Fundamentals of Management, 9e (Robbins) Chapter 2 The Management Environment 1) A common myth is that organizations can be too big to fail.

Answer: TRUE Explanation: Many people believe that large companies that dominate their industries don't require outstanding management. They are, in fact, often described as "too big to fail."

Diff: 1 Objective: 2.1 Learning Outcome: Describe the components of the management environment 2) Organizational consistency is one of the foundations of long-term success.

Answer: FALSE Explanation: The one constant that all organizations face, regardless of their size, is the need to change and adapt to today's business environment.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment 3) Organizational traditions should not be followed if they don't fit with the current demands of customers and shareholders.

Answer: TRUE Explanation: Organizations that are too bound by tradition and don't (or refuse to) change are less and less likely to survive the turbulence in today's world.

Diff: 2 Objective: 2.1

Learning Outcome: Describe the components of the management environment 4) A major cause of the shutdown of a BMW assembly plant in South Carolina in 2010 was a bank crisis in Iceland.

Answer: FALSE Explanation: A volcanic eruption in Iceland was the cause of the shutdown, preventing deliveries to the plant.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management

5) The external environment of an organization includes factors and forces that can affect how the organization operates.

Answer: TRUE Explanation: The external environment includes any outside agent that can influence the performance of the organization.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Describe the components of the management environment 6) The components of an organization's external environment include a technological component and a political component.

Answer: TRUE Explanation: The technological component may include such things as new software, while the political component may include office holders who directly affect a company's business.

Diff: 2 AACSB: Analytic thinking Objective: 2.1 Learning Outcome: Describe the components of the management environment 7) The sociocultural component of the external environment of an organization includes trends and traditions, but not basic attitudes and values.

Answer: FALSE Explanation: The sociocultural component of the external environment includes all beliefs and values as well as attitudes and behavioral patterns.

Diff: 1 Objective: 2.1 Learning Outcome: Describe the components of the management environment 8) The overall trend toward globalization is part of the political component of an organization's external environment.

Answer: FALSE Explanation: Globalization is part of the global component of an organization's external environment.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management

9) High interest rates have been identified as a major cause of the economic meltdown that began in 2008.

Answer: FALSE Explanation: Low interest rates, rather than high interest rates, have been named as a cause of economic problems.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 10) Prior to the recent recession that began in 2008, many businesses became highly leveraged, which is another term for a company with a high debt-to-assets ratio.

Answer: TRUE Explanation: With cheap credit, companies tended to take on too much debt.

Diff: 2 AACSB: Analytic thinking Objective: 2.1 Learning Outcome: Describe the components of the management environment 11) The U.S. housing market been identified as a major cause of the economic meltdown that began in 2008.

Answer: TRUE Explanation: When the bubble in the housing market burst, the economy went into recession.

Diff: 2 AACSB: Analytic thinking Objective: 2.1 Learning Outcome: Describe the components of the management environment 12) The capitalistic system that the United States uses is thought to be perfect by most economists.

Answer: FALSE Explanation: The recent recession alone provides proof that the system is far from perfect.

Diff: 1 Objective: 2.1 Learning Outcome: Describe the components of the management environment 13) Experts now agree that the role of government in the U.S. economy will be greatly diminished in the years to come.

Answer: FALSE Explanation: If anything, the opposite is true. Experts see a more active role for government in the U.S. economy in the years to come.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment

14) Problems in the U.S. economy have affected economic systems around the world.

Answer: TRUE Explanation: Problems within the U.S. home mortgage market and other equity systems have had serious economic repercussions in world markets.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 15) Experts believe that in the future, income disparity between countries and individual wage earners will be eliminated.

Answer: FALSE Explanation: The World Economic Forum identified two significant risks facing business leaders and policy makers over the next decade: "severe income disparity and chronic fiscal imbalances."

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 16) According to a recent poll, 50 percent of adults feel that economic inequality is not a problem.

Answer: FALSE Explanation: A Harris Interactive Poll found that only 10 percent of adults think that economic inequality is "not a problem at all."

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 17) The symbolic view of management holds that an organization's performance is based solely on the decisions of managers.

Answer: FALSE Explanation: The omnipotent view of management holds that an organization's performance is based solely on the decisions of managers.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

18) The omnipotent view of management holds that good managerial decisions result in an organization's success.

Answer: TRUE Explanation: The omnipotent view of management contends that managerial decisions make the difference between success and failure.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 19) According to the omnipotent view of management, American managers would not be blamed for the economic meltdown of 2008.

Answer: FALSE Explanation: An omnipotent manager takes credit for successes and responsibility for failure.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 20) The quarterback of a football team assumes a largely symbolic role for his team because his performance largely determines the outcome of the game.

Answer: FALSE Explanation: Since a quarterback's performance is critical, he is assuming an omnipotent role.

Diff: 3 AACSB: Analytic thinking Objective: 2.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 21) The business world cannot count on regulation to reform the economy.

Answer: TRUE Explanation: Regulation can go only so far. In order for true reform to occur, business people need to assume a new mindset.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment 22) The age of a population is one of its most important demographics.

Answer: TRUE Explanation: Different generations have different styles, tastes, and goals that affect how business is done.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

23) The phrase "demographics is destiny" refers to the idea that older nations get tired, which causes their performance to slip.

Answer: FALSE Explanation: The phrase "demographics is destiny" refers to the idea that the size and values of various age groups in a society can greatly influence events in that society.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 24) Technology has changed the way managers manage by forcing them to keep track of employees in remote locations at all times of the day and night.

Answer: TRUE Explanation: Managers in today's world must stay in touch with employees who can be located anywhere in the world and may have problems at any time of any day.

Diff: 2 AACSB: Use of information technology Objective: 2.1 Learning Outcome: Describe the components of the management environment 25) The age of a population is one of its most important demographics.

Answer: TRUE Explanation: Different generations have different styles, tastes, and goals that affect how business is done.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 26) Gen Xers are generally the children of the Baby Boomers.

Answer: FALSE Explanation: Gen Yers, born between 1978 and 1994, are generally the children of the Baby Boomers.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

27) The cell phone industry faces a stable business environment.

Answer: FALSE Explanation: The cell phone industry faces constant and rapid change, making it a dynamic business environment.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment 28) An industry with a dynamic business environment that is also highly complex faces the maximum amount of environmental uncertainty.

Answer: TRUE Explanation: This kind of business corresponds to cell 4 in the environmental uncertainty matrix.

Diff: 3 AACSB: Analytic thinking Objective: 2.2 Learning Outcome: Describe the components of the management environment 29) Given a choice, managers would prefer to operate in an environment that has a minimum of uncertainty.

Answer: TRUE Explanation: A dynamic environment that is also highly complex is very difficult to plan for and very difficult for decision making.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment 30) A good manager considers the interests of all stakeholders equally when making an important decision.

Answer: FALSE Explanation: A manager should consider the interests of all stakeholders, but different stakeholders merit more or less consideration depending who they are and what their relationship is to the organization.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment 43) Which organizational myth is not supported by the experiences of companies such as Arthur Andersen, Borders Group, Enron and Circuit City?

A) Strong organizational culture will always prevail.

B) A brilliant business plan will lead to success.

C) Customers are always right.

D) Too big to fail Answer: D Explanation: D) Anyone who thinks large size is any guarantee of success only needs to take a look at this list of large companies that once seemed indestructible: Arthur Andersen, Borders Group, Circuit City Stores, Enron, Fashion Bug, Hostess Brands, KB Toys, Lehman Brothers, Polaroid, Sharper Image, Steve & Barry's, and Tower Records, among others.

Diff: 2

Objective: 2.1 Learning Outcome: Explain the influences of organizational culture 44) What is the meaning behind the statement, "Too big to fail"?

A) Large organizations that dominate the industry can make management mistakes but still survive.

B) Small to medium organizations are not as innovative as large companies and hence not as successful.

C) Large companies are more customer responsive than small companies.

D) History has shown that large companies rarely fail.

Answer: A Explanation: A) Many people believe that large companies that dominate their industries don't require outstanding management. They are, in fact, often described as "too big to fail." Their competitive advantages such as market share, economies of scale, prime locations, patents, or name recognition are assumed to create enough protection so that even mediocre management can generate substantial profits.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment

45) What did the effect of a volcanic eruption in Iceland on production of Nissans in a plant in Japan illustrate?

A) how much organizations depend on their banks B) how much organizations depend on their external environment C) how much organizations depend on corporate culture D) how much organizations depend on a strong brand image Answer: B Explanation: B) The eruption showed that a disruption in the external environment in one place in the world can affect other places thousands of miles away. The ash from Icelandʹs volcano prevented critical supplies from being shipped to Japan. This showed how truly global todayʹs business world can be.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 46) Which components of the external environment of the BMW plant in Spartanburg, South Carolina were disrupted by the volcanic eruption in Eyjafjallajökull, Iceland?

A) the demographic and global components B) the political and legal components C) the economic and global components D) the sociocultural and demographic components Answer: C Explanation: C) The disruption illustrated the importance of the external environment in terms of economics, since ash from the eruption stalled the delivery of automobile parts, and the global component, since it was an event on one side of the globe that affected events on another side of the globe.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management

47) Which of the following is not involved with the demographic component of an organization's external environment?

A) values B) gender C) race D) income Answer: A Explanation: A) The demographic component of an organization's external environment involves issues that relate to broad population characteristics such as age, income, number of people in a family, education level, and so on. Values are not measurable on this broad level, so they are not considered a demographic trait.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Describe the components of the management environment 48) A ban on gay marriage is an example of a change in which components of an organization's external environment?

A) political/legal and technological B) economic and demographic C) sociocultural and global D) sociocultural and political/legal Answer: D Explanation: D) A ban on gay marriage has a sociocultural impact on an organization, indicating how the public feels about values, behavior, and lifestyles. It also has a political/legal impact since the change was brought about by a new law.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Describe the components of the management environment 49) Which event triggered the recent recession that began in 2008?

A) Consumers were unwilling to purchase electronic equipment.

B) Businesses were unable to make loan payments.

C) Homeowners were unable to make mortgage payments.

D) Renters were unable to find available housing.

Answer: C Explanation: C) The economic downturn began with a collapse in housing prices, which in turn caused speculating homeowners to be unable to meet mortgage payments. The failure to make payments caused a market crash, a credit crunch, and many other negative events that ultimately resulted in the recession.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment

50) Which of the following contributed most to many companies becoming highly leveraged in the lead-up to the recent economic downturn in 2008?

A) high interest rates B) low interest rates C) limited liquidity D) no liquidity Answer: B Explanation: B) Very low interest rates encouraged companies to borrow far more than they should have during the years that led up to the downturn. Ratios of debt to assets soared, creating highly leveraged companies. Had borrowing not been so cheap, many companies might have avoided overborrowing.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment 51) Which of the following has been identified as a significant risk to business leaders in the next decade?

A) stagnation in technology B) income disparity C) declining birth rates D) political instability Answer: B Explanation: B) The World Economic Forum identified two significant risks facing business leaders and policy makers over the next decade: severe income disparity and chronic fiscal imbalances.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Describe the components of the management environment 52) According to polls, which percent of adults believe that economic inequality is not a problem at all?

A) 90 B) 50 C) 30 D) 10 Answer: D Explanation: D) A Harris Interactive Poll found that only 10 percent of adults think that economic inequality is "not a problem at all."

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment

53) In the U.S. the gap between the rich and poor is ________.

A) decreasing B) accepted C) hidden D) increasingly tolerated Answer: B Explanation: B) In the United States, the gap between the rich and the poor has been much wider than in other developed nations for decades and was accepted as part of our country's values and way of doing things.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Describe the components of the management environment 54) Which of the following is NOT a feature of the U.S. model of capitalism in the twentieth and twenty-first centuries?

A) open markets B) large-scale operations C) full lifetime job security D) corporate model of ownership and organization Answer: C Explanation: C) The U.S. model that has been emulated around the world includes open markets, large operations based on mass production, and a hierarchical corporate model of organization that features separate business divisions and collective bargaining with labor. The U.S. model does not ensure job security for any period of time.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.1 Learning Outcome: Describe the components of the management environment

55) The market crash in 2008 was largely a result of ________ the free market system.

A) newfound confidence in B) indifference toward C) new curiosity in D) an erosion of trust in Answer: D Explanation: D) The 2008 crisis ushered in an era in which a great deal of trust and goodwill was destroyed by the overreaching of financial managers during the previous decade. Taking on too much risk and making speculative deals ended up bringing the economy to its knees and threatened the solvency of the entire financial system. When the federal government bailed out the large institutions whose irresponsible actions had caused the crisis, citizens were outraged, and that anger has not subsided as bankers continue to behave recklessly and reward themselves with lavish compensation in the face of abject failure. The other choices—confidence, indifference, or curiosity in the system—are incorrect because they don't evince this anger and distrust.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment 56) Which of the following views of management would agree with the statement that managers should not be held accountable for changing global economic conditions?

A) the geocentric view B) the new-world order view C) the demographic view D) the symbolic view Answer: D Explanation: D) The symbolic view of management contends that a manager's ability to affect the organization's outcomes is constrained by external factors such as the economy.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 2.1 Learning Outcome: Describe the components of the management environment

57) Which of the following identifies an outcome of the recent economic crisis of 2008?

A) fewer business regulation B) increased business regulations C) no business regulations D) voluntary business regulations Answer: B Explanation: B) The excessive risks that companies took coupled with the fact that the government needed to provide bailouts to such companies as GM and AIG strongly indicated to policy makers that more, not fewer, regulations were required for a healthy business climate. In today's business environment, voluntary regulations are no longer deemed to be satisfactory as it was largely voluntary measures that allowed the disastrous situation to arise in 2008.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 2.1 Learning Outcome: Describe the components of the management environment 58) Which view of management describes a situation in which managers are directly responsible for a company's success or failure?

A) the structural view of management B) the symbolic view of management C) the omnipotent view of management D) the realistic view of management Answer: C Explanation: C) The symbolic view of management holds that external factors, not managerial decisions, determine success or failure. The omnipotent view holds the opposite position, that good managers, making good decisions, can decide a company's fate.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 59) Which kind of company would be less likely to fire its CEO after a poor performance?

A) a company with a symbolic view of management B) a company with a realistic view of management C) a company with an external view of management D) a company with an omnipotent view of management Answer: A Explanation: A) A company with an omnipotent view of management would tend to hold its leaders responsible for failure and would therefore be more likely to fire its leaders after a poor performance. A company with a symbolic view of management would tend to see the leader's role as less consequential to success or failure, and therefore there would be no reason to fire the CEO if he or she otherwise was doing a good job.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the roles of managers and the skills they need to

succeed within an organization 60) Which kind of company would you expect to pay its CEO the most?

A) a company with a symbolic view of management B) a company with a liberal view of management C) a company with a semipotent view of management D) a company with an omnipotent view of management Answer: D Explanation: D) Having an omnipotent view of management means that the company places maximum value on the decisions that its CEO makes. Therefore, all other things being equal, the CEO for a company with an omnipotent view has the most riding on his or her decisions so he or she deserves the greatest compensation. Of course, in the real world this view may or may not hold true.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization 61) Which of the following best explains why increased regulations cannot be the complete solution to reforming the economy?

A) The regulators are all corrupt.

B) It is extremely difficult to write regulations.

C) There are too many transactions to keep track of.

D) There are too many regulations to keep track of.

Answer: C Explanation: C) While some regulators can be corrupt, and some regulations are unclear and hard to keep track of, the most important reason for why regulations cannot be the key to reform is that the economy is too complex; there are too many economic interactions to keep track of using regulations all by themselves. Rather than have regulations govern activity exclusively, there needs to be some kind of selfpolicing mechanism that prevents abuse and keeps the situation from getting out of hand.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 2.1 Learning Outcome: Describe the components of the management environment

62) Which of the following are many managers concerned about as a result of increased government participation in the economy?

A) an overheated economy B) a growing budget deficit C) an enormous budget surplus D) corrupt government officials taking bribes Answer: B Explanation: B) Though bribes may be a problem in isolated cases, most managers worry about a federal budget deficit in the trillions, thanks to stimulus bills and other items that were initiated to prevent disaster following the meltdown of 2008. Almost no one is worried about an overheated economy—in fact, anemic growth has been the problem for since the recent economic crisis. Similarly, budget surpluses are not on the horizon for the foreseeable future.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment 63) What will cause countries such as Denmark to shrink with respect to the size of their economy, relative to other nations?

A) no social safety net B) welfare payments C) high birth rate D) low birth rate Answer: D Explanation: D) Shrinking populations augur a smaller share of the world's economic pie in developed European nations such as Denmark, Norway, and Belgium. Social safety nets and welfare payments have little to do with the size of the economies of these nations, which, incidentally, are quite healthy despite the low growth rate of their populations.

Diff: 2 Objective: 2.1 Learning Outcome: Describe the components of the management environment

64) Which of the following identifies the best illustration of the phrase "demographics is destiny"?

A) India is experiencing explosive growth partly because its population is growing rapidly.

B) India is experiencing poverty because its population is growing rapidly.

C) The United States is experiencing slow growth partly because its population is growing rapidly.

D) The United States is experiencing healthy growth partly because its population is not growing and people are saving their resources.

Answer: A Explanation: A) Nations that have expanding populations tend to grow quickly because young people are working and have needs. That is the situation in India and China today. Even though those nations have great problems, their burgeoning populations are spurring economic expansion and growth. Nations in which population is not increasing tend to grow through increases in productivity rather than general expansion.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 65) Which of the following provides the best illustration of technology transforming how managers manage in the workplace?

A) Managers oversee very large design teams.

B) Managers must supervise design teams more closely.

C) Managers oversee very large clerical and secretarial staffs.

D) Managers oversee very small clerical and secretarial staffs.

Answer: D Explanation: D) Where managers once needed to manage extremely large clerical and secretarial staffs, many clerical jobs have now been replaced due to technological innovations. For example, much of the typing and record-keeping that was once done by several workers is now done by a single worker using a sophisticated computer program. Things such as design teams have decreased rather than increased in size because a single person can now accomplish the work of many designers using modern computer design programs. At the same time, design teams require much less, not much more, supervision in today's business climate.

Diff: 3 AACSB: Use of information technology Objective: 2.1 Learning Outcome: Describe the components of the management environment

66) Which demographic do managers pay closest attention to with respect to largescale trends in the business world?

A) age B) sex C) employment status D) geographic location Answer: A Explanation: A) Because enormous cohorts of people form various generational groups that all go through the same life cycle changes at roughly the same time, age is the demographic that managers pay closest attention to. For example, a company that sells premium cooking pots may pay close attention to the size of the generation that is currently of marriage age. If large numbers of people are likely to marry in the next five years, they are likely to purchase large numbers of cooking pots. Similarly, if there is likely to be a marriage "bust" rather than a boom, cook pot sales are likely to decrease.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 67) How are the "Post-Millennials" likely to be different from previous generations?

A) They require products that are completely customized to the individual.

B) They require products that are completely generic and not at all customized to the individual.

C) They require products that are serious and meaningful rather than frivolous and fun.

D) They require products that are of much higher quality than those required by individuals in previous generations.

Answer: A Explanation: A) The Post-Millennials have grown up with sophisticated technology.

Rather than purchase music albums, for example, this cohort grew up with customizeable iPods and other devices that allowed them to individualize their experience. Similarly, this group tends to watch TV not in the living room when it is being broadcast, but as an individual event that they experience when they want to see it on their computers.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

68) Which of the following nations is likely to experience the greatest population increase in the years to come?

A) Canada B) Spain C) Russia D) Nigeria Answer: D Explanation: D) Eighty percent of the babies being born in the world are being born in Asia and Africa. Therefore, of the countries listed, Nigeria is most likely to experience the greatest population gains in the coming decades.

Diff: 2 Objective: 2.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 69) Why were the Baby Boomers so much more influential than other generations with respect to changing American tastes and culture?

A) The Baby Boomers came after World War II when lifestyles were really changing.

B) The Baby Boomers were a much more coherent group than other generations.

C) The Baby Boomers were a much larger group than other generations.

D) The Baby Boomers were a much more free-spirited group than other generations.

Answer: C Explanation: C) Being coherent or free-spirited did not have the impact on culture the sheer size of the Baby Boom generation did. Because of its large size, the generation dictated almost every cultural trend and style for over forty years.

Diff: 3 AACSB: Multicultural and diversity understanding Objective: 2.2 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

70) Which statement about the external environment and employment is true?

A) External environmental conditions improve employment during upswings and worsen employment during downturns.

B) External environmental conditions worsen employment during upswings and improve employment during downturns.

C) External environmental conditions have no effect on employment during upswings and worsen employment during downturns.

D) External environmental conditions worsen employment during upswings and have no effect on employment during downturns.

Answer: A Explanation: A) During boom times, unemployment drops and wages tend to rise, improving the fortunes of the working public. During recessions and downturns, the opposite takes place: unemployment rises and wages tend to stagnate or drop. Overall, jobs closely correlate with the state of the economy.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment 71) Which of the following is likely to be the permanent result of the recent economic downturn in the United States?

A) Almost all of the jobs lost will not return.

B) About half of the jobs lost will not return.

C) About a quarter of the jobs lost will not return.

D) Almost all of the jobs lost will return.

Answer: C Explanation: C) In general, about 25 percent of the jobs lost during a recession are permanently lost and will not return even if the economy returns to a full-growth, nonrecession state. Most of these jobs will be replaced by new jobs in new industries that are growing.

Diff: 1 Objective: 2.2 Learning Outcome: Describe the components of the management environment 72) Which trend do most managers need to get used to in the coming years?

A) Most workers will be hired as permanent employees at a lower pay scale than they were in the past.

B) Many workers will be hired as consultants rather than as freelance employees.

C) Most workers will be hired as permanent employees rather than on a freelance basis.

D) Many workers will be hired on a freelance basis rather than as permanent employees.

Answer: D Explanation: D) The most dominant trend is that managers will hire freelance and contingency workers to fulfill specific roles and work on specific projects rather than hiring general employees. This policy is taken on because of efficiency; it saves companies money on both salaries and benefits. Drawbacks to the policy include lack of loyalty on the part of workers and general dissatisfaction on the part of workers because they lack benefits and job security.

Diff: 2 Objective: 2.2

Learning Outcome: Describe the components of the management environment 74) Which kind of company has the lowest amount of environmental uncertainty in the environmental uncertainty matrix?

A) cell 1 B) cell 2 C) cell 3 D) cell 4 Answer: A Explanation: A) Cell 1 identifies a company in an industry with little innovation and no new competitors that also has few components (customers, suppliers, etc.) in its environment. An example of this kind of company is the Zippo lighter company, which has a few simple products, few competitors, and few components to deal with in its industry.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment 75) Which of the following best defines environmental uncertainty?

A) the amount of innovation and creativity in an organization's internal environment B) the amount of resources and expertise in an organization's internal environment C) the amount of change and confidence in an organization's external environment D) the amount of change and complexity in an organization's external environment Answer: D Explanation: D) Environmental uncertainty is a measure of two things: change in an organization's environment with respect to its market, its products, its position in the market, and so on; and the amount of complexity it faces in its market as measured by the number of competitors, customers, suppliers, and so on.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment

76) A software company innovates constantly to keep up with new rivals that are constantly appearing on the scene. The software industry itself has an enormous number of players to deal with that includes retailers, online distributors, educational institutions, and government agencies. Where does the company belong on the uncertainty matrix?

A) cell 1 B) cell 2 C) cell 3 D) cell 4 Answer: D Explanation: D) The company's product is dynamic, so it is located on the right side of the matrix. The software industry has a large number of components to deal with, so the environment is complex. A dynamic/complex organization corresponds to cell 4.

Diff: 3 Objective: 2.2 Learning Outcome: Describe the components of the management environment 77) A TV reality show program essentially puts out the same product episode after episode, year after year, with little change and few rivals. The show exists in a TV industry that has hundreds of different components to keep track of. Where does the show belong on the uncertainty matrix?

A) cell 1 B) cell 2 C) cell 3 D) cell 4 Answer: C Explanation: C) The show itself does not change over time, so it qualifies as stable.

There are many components in the show's environment, so it rates as "complex." This stable/complex combination puts the company in cell 3.

Diff: 3 Objective: 2.2 Learning Outcome: Describe the components of the management environment 78) Which of the following is LEAST likely to be considered a stakeholder for a newspaper company, The Daily Recorder?

A) the paper boy who delivers the paper to customers B) critics who claim that all newspapers are biased and dishonest C) customers who buy the paper at newsstands D) subscribers Answer: B Explanation: B) Stakeholders include anyone who is affected by the organization's decisions or actions. So both a paper boy and customers are affected by the paper.

Critics who criticize the paper from afar are not stakeholders because what they do is not significantly affected by anything that the paper does.

Diff: 2 Objective: 2.2 Learning Outcome: Describe the components of the management environment

79) Which of the following is an internal stakeholder for the newspaper, The Daily Recorder?

A) the editor of The Daily Sun B) the city council C) shareholders in The Daily Sun D) The Daily Recorder shareholders Answer: D Explanation: D) The various parts of The Daily Sun are at best external stakeholders in The Daily Recorder since they belong to an organization that is a competitor of the paper. Similarly, the city council would be considered an external stakeholder, not an internal stakeholder. That leaves the shareholders of the paper itself—they are internal stakeholders.

Diff: 1 Objective: 2.2 Learning Outcome: Describe the components of the management environment 80) The Daily Recorder is trying to decide whether it will fire about 200 employees if things don't change in the near future. The paper is scheduling a meeting with the 200 employees. The employees want to include their own family members at the meeting.

How should the paper respond?

A) Family members are internal stakeholders, so they should have a separate meeting with the paper without the employees.

B) Family members are internal stakeholders, but they not should be allowed to attend the meeting.

C) Family members are external stakeholders, so they should be allowed to attend the meeting.

D) Family members are not stakeholders, so they should not be allowed to attend the meeting.

Answer: C Explanation: C) Family members should be considered stakeholders since the actions of the paper will directly affect their lives. As stakeholders, they may be allowed to attend the meeting. Note that the family members cannot be considered internal stakeholders since they are not officially involved with the paper.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 2.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

81) The Daily Recorder is considering raising its price from 60 cents to 75 cents.

Which stakeholders should it consider most in making this decision?

A) All stakeholders should be considered equally.

B) all internal stakeholders C) all external stakeholders D) its customers Answer: D Explanation: D) Though all stakeholders should be considered in an important decision, in most cases some stakeholders should be regarded as more critical than others. In this case, the customers who will be expected to pay the extra cost should be considered first and foremost.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 2.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 82) The Daily Recorder is considering charging online readers a flat fee for access to the news on their computers and electronic devices. Which stakeholder should the paper NOT worry about informing?

A) the paper's online customers B) the paper's rival, The Daily Sun C) the unions that control the paper's workers D) the paper's print subscribers Answer: B Explanation: B) The paper certainly should inform all readers of the change as a courtesy. The paper's unions also may be informed, though they may be only indirectly or marginally affected by the decision. One constituency that should not be told about the change is the paper's competitor. The less that The Daily Sun knows about the change, the more of a competitive advantage that the paper will get out of the change.

Diff: 2 AACSB: Use of information technology Objective: 2.2 Learning Outcome: Dynamics of the global economy 83) The Total Freedom political party is trying to determine its position on climate change. Whom should the party consider as its stakeholders?

A) official party members B) all potential voters C) all people in the world D) all people in the United States Answer: C Explanation: C) Since climate change affects the entire planet, stakeholders for this issue include all people on the planet, not just party members, voters, or citizens of the United States.

Diff: 2 AACSB: Dynamics of the global economy Objective: 2.2 Learning Outcome: Describe the components of the management environment

84) Which of the following identifies one reason why managers should NOT put time into managing stakeholder relationships?

A) Managing stakeholder relationships can lead to less predictability of environmental changes.

B) Managing stakeholder relationships can lead to more predictability of environmental changes.

C) Managing stakeholder relationships can lead to innovations.

D) Managing stakeholder relationships can lead to increased trust among stakeholders.

Answer: A Explanation: A) Managing stakeholder relationships can lead to more, not less, predictability of environmental changes. If stakeholders are aware of the actions and decisions that the organization is going to undertake, they are less likely to feel "surprised" by those actions and decisions and more likely to become cooperative with the organization itself. Stakeholders who are not kept "in the loop" are likely to feel resentful toward the organization and more likely to take actions that are against the organization's better interests.

Diff: 3 Objective: 2.2 Learning Outcome: Describe the components of the management environment 85) What do most high performing companies have in common when it comes to stakeholder relationships?

A) High performing companies tend to consider the interests of all stakeholder groups when they make important decisions.

B) High performing companies tend to consider the interests of internal stakeholder groups only when they make important decisions.

C) High performing companies tend to consider the interests of external stakeholder groups only when they make important decisions.

D) High performing companies tend not to consider the interests of stakeholder groups when they make important decisions.

Answer: A Explanation: A) High performing companies tend to be aware that the more input they get from stakeholders of every variety, the better off they are. Keeping stakeholders as informed as possible leads to better relationships and more input for how the company can succeed in a highly competitive marketplace. High performing companies recognize that they can't operate in a vacuum, and important decisions must be considered from every angle before they are made.

Diff: 3 Objective: 2.2 Learning Outcome: Describe the components of the management environment

Fundamentals of Management, 9e (Robbins) Chapter 3 Integrative Managerial Issues 28) In the socioeconomic view of organizational social responsibility, management's responsibility includes protecting and improving society.

Answer: TRUE Explanation: The socioeconomic view assumes that the organization is part of society and that all parts of society have a responsibility to do their share to do good. If one component of society feels exempt from this responsibility then others will quickly follow in kind, breaking the social compact and inviting chaos.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 29) One argument against businesses championing social responsibility issues is that being socially responsible can harm an organization's public image.

Answer: FALSE Explanation: In today's world, rather than harm an organization's public image, being socially responsible serves to improve an organization's public image, identifying it as a force for good.

Diff: 1 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 30) Long-term stability and the long-term ability to make profits is an argument for social responsibility.

Answer: TRUE Explanation: Socially responsible companies tend to have more long-term stability and ability to make profits than their counterparts that are not socially responsible.

Presumably, a better public image of being socially responsible helps build company loyalty, which in turn becomes an important asset during hard economic times.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 31) As long as it has broken no laws and done nothing unethical, a business has fulfilled its obligation to society.

Answer: FALSE Explanation: People today believe that since a business is given the opportunity to function in an economic arena, it is obligated to do more than just avoid criminal or unethical actions. Instead, a business is obligated to improve conditions in the world.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2

Learning Outcome: Discuss the role of ethics and social responsibility in management

32) A good example of social responsiveness is a company whose managers conduct business in an ethical way and strictly follows all local laws.

Answer: FALSE Explanation: Social responsiveness requires the organization to be responsive to some popular social need. For example, a company that builds a community recreation center in a community that lacks facilities is being socially responsive.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 33) Any action that is illegal is unethical and any action that is legal is ethical.

Answer: FALSE Explanation: There are many things that are legal but not ethical. For example, it is legal to be wasteful with fossil fuels, but given the problems we face today with global climate change, pollution, and high energy prices, this wastefulness is clearly not ethical.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management 34) Having a written code of ethics ensures that an organization's members will behave ethically.

Answer: FALSE Explanation: Over 90 percent of organizations, large and small, have written codes of ethics. Yet, that doesn't prevent organizations like Enron from committing wildly unethical and illegal acts.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management 35) A utilitarian view of ethics focuses on consequences and the greatest good for the greatest number of people.

Answer: TRUE Explanation: The utilitarian view holds that the most ethical position is the one that is best for the greatest number of people.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management

36) A theory of justice view of ethics focuses on individual liberties and privileges.

Answer: FALSE Explanation: A rights of justice view of ethics focuses on individual liberties and privileges. A theory of justice view of ethics focuses on making fair and impartial decisions.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management Explanation: A) The line between ethics and crime is crossed when laws are broken.

This is clearly what happened in the Enron and the Madoff cases—in both situations individuals committed crimes and ended up going to prison for those crimes. The fact that billions of dollars were involved, many people lost their life savings, and the perpetrators may have claimed to have excuses for what they did does not change the fact that people behaved both unethically and illegally in both cases.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 76) The classical view of social responsibility is that a for-profit organization's responsibility is ________.

A) to help as many people as possible B) to maximize both profits and the general welfare C) to maximize profits only D) to maximize opportunity for all Answer: C Explanation: C) The classical view of social responsibility is a purely economic view that looks at profits only. A for-profit company exists to make money. Therefore, its only responsibility is to maximize profits. Any actions for social good, such as to help people, create opportunity, or to improve the general welfare, would be looked upon as irresponsible because these actions would divert the organization from its stated goal.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

77) A company that meets its social obligation ________.

A) fulfills its economic responsibilities only B) fulfills its legal and economic responsibilities only C) goes beyond its legal and economic responsibilities and responds to some pressing social need D) does not need to obey local laws Answer: B Explanation: B) An organization's social obligation includes following legal and economic responsibilities only. Anything above that, such as responding to a pressing social need, is beyond the organization's social obligation.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 78) Which of the following is the best example of a company being socially responsive?

A) meeting hazardous materials standards B) giving Christmas bonuses to worthy employees C) displaying "think green" posters D) building a community day-care center Answer: D Explanation: D) Social responsiveness requires that an organization respond to some social need that has been identified within the community. Of the choices listed, only building a day-care center meets this requirement so it is the correct response.

Meeting hazardous materials standards is simply an example of following the law.

Christmas bonuses may be generous, but they are helping members of the organization, not the community at large. "Think green" posters may help people take action on environmental matters, but the posters themselves do not constitute effective actions that respond to a social need.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

79) The classical view of social responsibility holds that spending time, money, labor, or energy to improve society's welfare would ________.

A) deprive stockholders of resources that could be used to generate profits B) not have any positive or negative impact on stockholders C) help maximize profits for stockholders D) show stockholders that the company knows best Answer: A Explanation: A) The classical view of social responsibility holds that any use of resources that does not explicitly seek to increase profits is wasteful and deprives stockholders of the income that would otherwise be theirs. This means that spending on social welfare has a negative impact on profits, thus ruling out the choices regarding not having any impact on stockholders and maximizing profits for stockholders as correct responses. The idea that the company knows better than stockholders is not part of the classical view of social responsibility.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 80) The socioeconomic view of social responsibility states that a business ________.

A) is an economic agent only B) has no responsibility C) is a moral agent D) is a harmful agent Answer: C Explanation: C) A socioeconomic view of social responsibility sees businesses as more than just economic entities. A socioeconomic view of social responsibility sees businesses as entities that have moral responsibilities. Since a business exists within a sphere that is both economic and moral, a business should be considered to be both an economic and a moral agent. This eliminates "economic agent" and "harmful agent" as the correct response and identifies "moral agent" as the correct response. Note that as a moral agent, a business defines itself as a force for good or bad by its actions.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

81) The socioeconomic view is that management's social responsibility goes beyond making profits to include ________.

A) challenging norms within society and inciting people to rise up against injustice B) protecting and improving society's welfare C) sacrificing its own welfare to advance the cause of justice D) prosecuting those who break the law Answer: B Explanation: B) The socioeconomic view sees organizations as moral citizens of the society with a moral role to play. The view goes only as far as an organization looking after the general welfare of society as best it can in ways that are reasonable and not overly onerous. It does not suggest that organizations take on a revolutionary role, prosecute lawbreakers, or harm themselves in any way to fight injustice.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 82) When a company does the minimum that the law requires, it is meeting its ________.

A) social responsiveness goal B) economic responsibility C) ethical responsibility D) social obligation Answer: D Explanation: D) Social responsiveness goes beyond the minimum that the law requires and entails responding to some popular social need. An ethical responsibility also goes beyond a minimal legal stance, requiring a company not only to obey all laws but also to behave in a way that is fair and just. An economic responsibility requires the firm to pursue financial goals only. That leaves a social obligation, which may include only what is legally necessary as the minimum that a company must do.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

83) A factory that has adhered to all pollution control standards has ________.

A) been socially responsive B) been economically responsible C) been ethical D) met its social obligation Answer: D Explanation: D) Social responsiveness would require the factory to do more than simply follow the law; it would need to respond to some societal need as well.

Economic responsiveness would require the factory to meet its goals with respect to financial considerations. There is no way of knowing whether meeting pollution controls would accomplish this. Similarly, meeting pollution standards does not guarantee a factory has behaved ethically. Meeting those standards does, however, show that the factory's social obligation has been met.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 84) Social responsiveness refers to the capacity of a firm to ________.

A) address some pressing public need B) follow all government regulations C) differentiate between right and wrong D) be a role model for other organizations Answer: A Explanation: A) Social responsiveness must address some public need, such as improving the environment or helping people who lack the basic necessities of life.

Merely following government regulations, behaving ethically, or acting as a model for other organizations does not address a public need, so none of these choices is correct.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

85) When a firm advertises that it only uses recycled paper products, it is ________.

A) meeting its social obligation B) being cynical C) being socially responsive D) paying attention to the bottom line Answer: C Explanation: C) In using recycled paper products, the firm is meeting a societal need of reducing the amount of waste in the environment, so it qualifies as social responsiveness. A social obligation does only what the law requires, so unless there are laws requiring mandatory recycling, this act goes beyond what the law requires and does not qualify as social responsiveness. Recycling may not improve a company's bottom line, so recycling cannot be classified as paying attention to the bottom line. Similarly, though recycling can be done purely to improve a company's public image, there is no way of proving that the act has even a small element of cynicism.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 86) Proponents of the socioeconomic view of social responsibility believe that being socially responsive is ________.

A) good for business B) bad for business C) neither good nor bad for business D) bad for any business in a competitive market Answer: A Explanation: A) Supporters of the socioeconomic view think that being socially responsive gives an organization a positive public image that in the long run pays for itself in customer loyalty and profits. Being good for business rules out the choices regarding "bad for business" and "neither good nor bad for business" as correct choices. Positing that social responsibility is harmful only in competitive markets is beside the point since almost all businesses operate within competitive markets.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

87) ________ dictates that being socially responsible is the "right thing to do."

A) A public image B) An ethical obligation C) A public expectation D) A dilution of purpose Answer: B Explanation: B) A public image identifies the favorable publicity that an organization can get from being socially responsible, but it does not identify socially responsible behavior as the right thing to do. Similarly, public expectation reflects the modern attitude of people toward organizations, not a mandate of what must be done. A dilution of purpose is actually an argument against being socially responsible, so it is not a correct choice here. "An ethical obligation" is the correct response because it does require that individuals or organizations do the "right thing."

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 88) Supporters of social responsibility claim that being socially responsible ________.

A) increases short-term profits B) decreases long-term profits C) increases long-term profits D) decreases short-term profits Answer: C Explanation: C) Supporters claim that being socially responsible is good for business, builds customer loyalty, and over the long run increases profits. Supporters make no claims for short-term profits, thus eliminating answer choices that mention increases and decreases in short-term profits. "Decreases long-term profits" is incorrect because it states the opposite of the actual claim that supporters of being socially responsible make.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

89) Supporters of socially responsible businesses claim that by becoming socially responsible, businesses can expect ________.

A) less government regulation B) more government regulation C) more strict enforcement of laws D) more government interference Answer: A Explanation: A) The case that supporters make is that the more socially responsible companies are, the more government will trust them to do the right thing and the less government will see the need to intervene with regulations. This eliminates "more government regulation" and "more government interference" as correct choices because they both increase rather than decrease the amount of government intervention. It also militates against more strict enforcement of laws, which can be thought of as an indirect form of government interference.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 90) Since businesses have more power and resources than ordinary individuals, supporters of social responsibility claim that businesses have ________.

A) a good reason to ignore the needs of ordinary individuals B) no reason to act in a socially responsible way C) more reason to act in a socially responsible way D) less reason to act in a socially responsible way Answer: C Explanation: C) The very size and influence of businesses require them to do more than ordinary individuals to advance the public welfare, supporters of social responsibility argue. Since society allows the organization to have its privileged position of power and influence, the organization owes society a larger debt than any individual citizen. These ideas make "more reason to act in a socially responsible way" the correct response and rule out the other choices, all of which claim to diminish, rather than increase, the moral obligation of a business.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

91) Most studies have shown that companies that engage in social involvement ________.

A) receive a small positive benefit B) receive an enormous positive benefit C) experience a small negative effect D) experience an enormous negative effect Answer: A Explanation: A) The consensus for those who have tried to measure the impact of social involvement on company performance is that companies experience a small improvement in performance. However, no generalizations about the impact of social involvement can be made because the effect seems to vary greatly according to company size, type of industry, external conditions, and so on.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 92) People who doubt that there is a relationship between company performance and social involvement think that this could account for any positive performance effect seen in companies that practice social involvement.

A) The only companies that practice social involvement are highly unsuccessful companies that try to use social involvement to improve their image in the marketplace.

B) The only companies that practice social involvement are highly ambitious companies that use social involvement as a way to network and gain access to wealthy clients.

C) The only companies that practice social involvement are highly successful companies that can afford to waste time and energy on social involvement as a "luxury."

D) The only companies that practice social involvement are highly ambitious companies that use social involvement as a learning tool for their training programs.

Answer: C Explanation: C) Those who are skeptical that social involvement has any impact on company performance feel that any positive effects shown in studies are mere artifacts. They think that social involvement is a luxury afterthought that successful companies indulge in when they no longer need to worry about their place in the market. For example, super-successful companies like Google can practice social involvement simply as an indulgence.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

93) Suppose that a study shows that companies that were not socially involved tended to be less profitable than socially involved companies. Which of the following can be concluded?

A) Social involvement definitely causes a company's profits to decrease.

B) Social involvement definitely causes a company's profits to increase.

C) Social involvement may cause a company's profits to increase.

D) Social involvement may cause a company's profits to decrease.

Answer: C Explanation: C) A correlation cannot be mistaken for a cause and effect relationship.

Here we see that lack of social involvement correlates with low profits. The correlation does not mean that lack of social involvement was the cause of low profits. For example, the low profit companies that were not socially involved may have avoided social involvement because these companies were unsuccessful and felt that they needed to devote their attention to the practical matter of becoming more profitable. In other words, they were a self-selected group of troubled companies that did not feel that they could take the time to be socially involved.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 94) The argument against social responsibility that states that pursuing goals other than making profits diverts a company away from its primary goal of making profits is known as ________.

A) possession of resources B) too much power C) lack of skills D) dilution of purpose Answer: D Explanation: D) When a company whose primary goal is to make profits uses its resources for anything other than making profits, it is said to be diluting its purpose.

Too much power refers to a company acquiring an unfair oversupply of power from being socially responsible while lack of skills makes the argument that managers are not competent to tackle social issues. Finally, possession of resources is an argument for, not against, social responsibility.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

95) One prominent argument against being socially responsible makes the claim that business managers are ________ to address social concerns.

A) too impractical B) not competent C) too wealthy D) too out of touch Answer: B Explanation: B) No one makes the claim that business leaders are too impractical or too out of touch to be socially responsible, though the ideas may have a small measure of validity. Similarly, wealthy business leaders would in no way be prevented from addressing social concerns and in fact, according to the idea of noblesse oblige, wealth might be a good reason to act in a socially responsible way. That leaves the choice "not competent," which states that many people think that business leaders, not having training in social areas, are not qualified to try to help in these areas as the correct response.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 96) Those arguing against being socially responsible might make the claim that costs for social goals are ultimately ________.

A) paid for by the people being helped B) paid for by companies in the form of tax breaks C) paid for by consumers in the form of higher prices D) are never paid by anyone Answer: C Explanation: C) There is no evidence that the cost of social goals gets paid for by the people who benefit from the services provided, so that is not a correct response. Tax breaks would be an extra cost, not a way to pay for social goals, so that would rule out the choice regarding tax breaks. The choice regarding never being paid by anyone is incorrect because all costs are presumed to be ultimately paid by someone. "Paid for by consumers in the form of higher prices" is the correct response, since companies may initially bear the costs of social goals, but as they see their costs rising they are likely to raise prices, effectively causing consumers to ultimately be the payers of the bill.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

97) Which of the following is NOT an argument against the idea that companies should be socially responsible?

A) costs B) too much power C) violation of profit maximization D) public expectations Answer: D Explanation: D) Costs, too much power, and violation of profit maximization are all legitimate arguments against companies being socially responsible. Costs indicate that socially responsible actions do not cover their own costs and so end up costing a company money. Too much power indicates that companies will accumulate an overabundance of power as a result of pursuing social goals, thereby increasing their already too-large social influence. Violation of profit maximization indicates that pursuing social goals violates a company's obligation to seek the highest profits possible. Only public expectations is an argument for social responsibility—it claims that public opinion strongly supports social goals, so companies benefit from positive publicity when they pursue them.

Diff: 1 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 98) "Lack of accountability" argues against a firm being socially responsible by saying that once actions are taken there is no one ________.

A) to take responsibility if things go wrong B) to take credit if things work out well C) to speak to the media to put a spin on actions taken D) to follow up afterward Answer: A Explanation: A) Accountability is taking responsibility for actions. That means that "take responsibility if things go wrong" is the correct response because companies that pursue social goals typically have no mechanism in place to deal with problems that arise due to actions on behalf of social goals. There would also be no specific person to take credit for successful actions, to follow up on actions, or to "spin" the actions. However, only the correct choice constitutes an argument against social responsibility.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

99) Which of the following best defines sustainability for a company?

A) running the company with a strategy that is both profitable and good for the environment B) running the company with a strategy that is profitable whether or not it is good for the environment C) running the company with a strategy that is good for the environment even if it is not profitable D) running the company with a strategy that is does not change the environment in any way Answer: A Explanation: A) Sustainability is about doing business in a way that preserves the environment for future generations. Responsible businesses see no advantage in making a quick profit now that results in harming the environment for the future. In a sustainable business, operations are carried out that do not harm the environment.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 100) What does Wal-Mart's business policy say about the company's belief in global climate change?

A) Wal-Mart must believe that global climate change is a hoax.

B) Wal-Mart must believe that global climate change is a real threat.

C) Wal-Mart must believe that global climate change is a left-wing conspiracy.

D) Wal-Mart must believe that global climate change is a right-wing conspiracy.

Answer: B Explanation: B) In taking decisive action with respect to reducing greenhouse gases, Wal-Mart is making a clear statement that it believes claims for global climate change are real and urgent. Wal-Mart's moves are the equivalent of removing 3.8 million cars from American roads for an entire year.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management

101) Which of the following is LEAST likely to be viewed by a company as an advantage of stressing sustainability?

A) The company is seen as efficient.

B) The company is seen as ethical.

C) The company avoids bad press.

D) The company avoids economic ramifications of being seen as socially irresponsible.

Answer: A Explanation: A) Sustainability gives a company a positive image in the public's mind, making it seem ethical and avoiding the potentially disastrous fallout of taking a socially irresponsible position. Efficiency is one thing that is not generally associated with sustainability. In fact, many sustainability measures actually decrease company efficiency slightly, a price most responsible managers are willing to pay.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 102) Which of the following is a basic definition of ethics?

A) rules that define good and evil B) laws that define legal and illegal C) principles that define right and wrong D) principles that define standards of decency Answer: C Explanation: C) Ethics is concerned with the evaluation of actions—whether they are right or wrong—rather than the conditions of good and evil that often underlie those actions. This indicates that "principles that define right and wrong" is the correct choice for this question and "rules that define good and evil" is incorrect. Questions of whether acts are legal or illegal are also related to ethics, but legal and illegal refer to formal written laws covering a wide array of issues while ethics generally refers to more basic moral principles that always focus on right and wrong. Standards of decency are also related to ethics, but they are more concerned with what is socially acceptable rather than what is right and wrong.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management

103) A ________ is a formal document that states an organization's primary values and the ethical rules it expects its employees to follow.

A) mission statement B) statement of purpose C) code of ethics D) vision statement Answer: C Explanation: C) How ethical questions are addressed within an organization can be different from how they are dealt with in the outside world. For example, fraternization between individuals inside an organization (e.g., teacher and student in a school) may be frowned upon even though the same relationship outside the organization might not raise any ethical eyebrows (e.g., both teacher and student are adults). That is why most organizations draft a written code of ethics to provide guidance for members. None of the other choices—a mission statement, a statement of purpose, or a vision statement—deals with ethical issues, so these choices are incorrect.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management 104) About ________ of organizations of 10,000 or more employees have a written code of ethics.

A) one-third B) half C) 70 percent D) 97 percent Answer: D Explanation: D) The fact that 97 percent of large organizations have written codes of ethics suggests that these codes are at least useful, if not highly effective. However, ethics codes are usually only as effective as the organizational culture in which they are instituted. Those organizations that take ethics seriously usually have fewer problems dealing with ethics, regardless of how prominent their code is in their everyday operations. In most cases, written codes of ethics are not referred to in everyday interactions but instead are used to provide guidance in resolving conflicts and other moral issues.

Diff: 1 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management

105) In most cases, organizations that have managers who behave ethically tend to have ________.

A) more productive employees B) more ethical employees C) less ethical employees D) employees who are no more or less ethical than average Answer: B Explanation: B) Being a good role model with respect to ethics does affect ethics of subordinates. Managers who behave unethically or who tolerate unethical behavior tend to promote similar attitudes among subordinates. That is why "more ethical employees" is correct—ethical managers tend to have ethical workers—and why "more productive employees" and "employees who are no more or less ethical than average" are not correct. There is no established or documented relationship between ethical behavior and productivity, so "more productive employees" is incorrect.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management 106) A(n) ________ view of ethics states that more productive workers should get more pay and less productive workers less pay, regardless of other circumstances.

A) rights B) utilitarian C) theory of justice D) individual liberties Answer: B Explanation: B) A rights view of ethics is concerned with protecting the rights of individuals to enjoy individual liberties such as free speech and due process, so both rights and individual liberties are not correct responses for this question. A theory of justice view of ethics is concerned with issues like a living wage—employees are entitled to be paid enough to live on no matter what the law says or other circumstances dictate. The theory of justice view stands in direct contradiction to the utilitarian view, the correct response here, that states that productivity is all that matters with regard to pay and that abstract ideas such as justice or fairness should not be considered for this issue.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management

107) A manager who subscribes to the theory of justice view of ethics might pay lowlevel employees ________.

A) the minimum wage B) more than the minimum wage C) less than the minimum wage D) according to how productive they were Answer: B Explanation: B) A manager who subscribes to the theory of justice view of ethics takes societal conditions into account when making decisions. If a worker is unable to live on the minimum wage, this manager is likely to pay more than that amount to ensure that she is treating her employees in a fair and just way. This rules out "the minimum wage" and "less than the minimum wage." It also rules out "according to how productive they were," which corresponds to a utilitarian view of ethics, rewarding workers only in proportion to how valuable they are to the organization.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management 108) How might a manager with a rights view of ethics view the prospect of forbidding an employee from making what he feels are "misguided" political statements on her non-company website?

A) The manager would ask the employee to take down the website on the grounds that it violates company policy.

B) The manager would order the employee to take down the website on the grounds that its positions are foolish and wrong.

C) The manager would order the employee to take down the website on the grounds that it misrepresents the company.

D) The manager would not interfere with the website.

Answer: D Explanation: D) A rights view of ethics holds that all people have clear rights that include such things as right to privacy and free speech. Under free speech, the manager would have to concede that the employee has a right to express herself even if he personally feels that the positions she takes are foolish and wrongheaded. Since the employee has the right of free speech, he would not interfere with the website as long as it didn't associate the company with her views.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management

109) Which of the following is most likely at the root of the problems that befell an unethical company like Enron?

A) poor ethics training programs B) no written code of ethics C) leaders with such high ethical standards that ordinary people could not hope to live up to them D) leaders with poor ethical standards Answer: D Explanation: D) Though ethics programs can have some effect on the morality of a company, ultimately the ethics of a company boils down to two things—the character of the employees and the character of the company leaders. There is little that leaders can do about the ethics of their employees—other than choose "better" employees.

However, there is much that leaders can do to set standards for employees. If leaders make it a point to exhibit ethical behavior in every way, the message usually gets through to employees and affects their behavior. Similarly, an atmosphere of cynicism and ruthlessness also permeates to all levels of an organization. With Enron, this "rotten" attitude was most likely the cause of the company's ethical failures.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management 110) Which of the following best identifies how well ethics can be learned?

A) Ethical training can increase awareness of ethical issues.

B) Ethics are inborn and cannot be changed or learned.

C) Ethical problem-solving practice helps almost all people avoid ethical dilemmas.

D) Ethical problem-solving practice is worthless.

Answer: A Explanation: A) A person's ethics can change, but it is difficult to identify how much training programs and ethical problem-solving practice can accomplish. Clearly, training is not a waste of time, but it may not be extremely helpful in many cases either. The best experts can say is that efforts to improve one's ethics at the very least help people become more mindful and cognizant of ethical situations, problems, and issues.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 3.3 Learning Outcome: Discuss the role of ethics and social responsibility in management

Fundamentals of Management, 9e (Robbins) Chapter 4 Foundations of Decision Making 1) In decision making, a problem can be defined as a discrepancy between what exists and what the problem solver desires to exist.

Answer: TRUE Explanation: A problem is a difference between a desired state and an existing state.

For example, suppose a person is hungry—the existing state of not having food. The desired state is to obtain food. So the problem is defined as the difference between the no-food state and the food state.

Diff: 2 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 2) The second step in the decision-making process is identifying a problem.

Answer: FALSE Explanation: The identification of a problem is the first step in the decision-making process. Once you have identified a problem, you can decide how to solve it.

Diff: 1 Objective: 4.4 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 3) A decision criterion defines factors that are relevant in a decision.

Answer: TRUE Explanation: Decision criteria are comprised of factors that will affect a decision. If the decision is between driving or riding a bike to work, criteria might include cost, weather, convenience, ecological considerations, time, clothing, and so on.

Diff: 2 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 4) Managers identify a problem by comparing the current state of affairs to some standard.

Answer: TRUE Explanation: The standard for comparison might be a goal that has been set or comparison with some historical standard or standard set by a competitor. For example, a manager might detect a discrepancy between a goal of 100 units sold and the existing state of only 50 units sold. This discrepancy constitutes a problem that must be solved.

Diff: 3 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

5) All criteria are equally important in the decision-making process.

Answer: FALSE Explanation: Criteria have differing values depending on their importance. The importance of an individual criterion is indicated by how it is weighted. The greater the weight assigned to the criterion, the greater its importance.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 6) Identifying the wrong problem is just as much a failure for a manager as identifying the right problem and failing to solve it.

Answer: TRUE Explanation: Problem identification is a critical part of problem solving and decision making. Solving the wrong problem does nothing to further a manager's goals so it is of no value.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 7) The final step of the decision-making process is to implement the alternative that has been selected.

Answer: FALSE Explanation: Implementation of the best alternative is the second-to-last step in the process. The final step of the process is to appraise the result of the decision to see if it solved the problem.

Diff: 1 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 8) A heuristic can simplify the decision-making process.

Answer: TRUE Explanation: A heuristic is a rule of thumb that is used to simplify the decisionmaking process by allowing the decision maker to focus on just a few variables rather than all variables. When used wisely, heuristics make decision making easier and simpler.

Diff: 1 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

9) Because heuristics simplify the decision-making process, they are unlikely to lead to errors.

Answer: FALSE Explanation: By virtue of their simplicity, heuristics can lead to many different kinds of biases and errors. Using heuristics lures decision makers into ignoring critical elements of the situation and oversimplifying the problem.

Diff: 1 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 10) Decision makers who seek information that matches what they already know are guilty of confirmation bias.

Answer: TRUE Explanation: Confirmation bias means that the decision maker has already made up his or her mind and is seeking only the information that will confirm that position.

Diff: 1 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 11) A basketball coach who takes a very good shooter out of a game because she missed her last two shots has availability bias.

Answer: TRUE Explanation: Availability bias is the tendency to overaccentuate recent history and discount long-term patterns. This basketball coach is ignoring long-term patterns—the player is a good shooter—in favor of very recent history—two missed shots—so he is displaying availability bias.

Diff: 1 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 21) Programmed decisions tend to be routine.

Answer: TRUE Explanation: A programmed decision is a routine decision that works well in solving structured problems that present no ambiguity or unknown elements. Programmed decisions can usually be made using a systematic procedure, rule, or policy.

Diff: 1 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 22) A rule is simpler than a policy or a procedure to implement.

Answer: TRUE Explanation: A rule is a simple statement that can be applied directly to a situation.

For example, a broker can easily follow a rule to sell a specific stock when it reaches a specific price point. A procedure or policy may have an identical outcome, but a more complicated series of steps must be taken to arrive at that outcome.

Diff: 2

Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 23) Implementing a procedure requires more judgment and interpretation than implementing a policy.

Answer: FALSE Explanation: A procedure is a series of steps that must be followed to arrive at a decision, each of the steps being clear and straightforward. A policy provides guidelines rather than steps for the decision maker to follow. Each guideline must be interpreted and evaluated for the situation at hand. Therefore, a policy requires much more judgment and interpretation than a procedure.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 24) A highway speed limit is an example of a policy.

Answer: FALSE Explanation: A highway speed limit is an example of a rule, not a policy. Policies require the decision maker to exercise judgment and interpretation. Following a speed limit, on the other hand, involves no interpretation. The driver simply must not exceed the posted speed.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

25) Managerial decisions are likely to become more programmed as managers rise in an organizational hierarchy.

Answer: FALSE Explanation: Problems that managers face become more unique, ambiguous, and difficult as the status of a manager rises, not more programmed. Top managers are paid more than lower-level managers specifically because they are expected to make difficult decisions. More routine decisions are made by lower-level managers.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 26) Most managerial decisions include an element of risk.

Answer: TRUE Explanation: Few situations involve certainty, in which a manager knows all outcomes in a situation and can choose between them. Instead, situations usually involve risk, in which the manager must estimate the probability of different outcomes.

Diff: 1 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 27) Uncertainty involves a situation in which the probability of a certain outcome is known to be small.

Answer: FALSE Explanation: In an uncertain situation, the probabilities of specific outcomes are not known and cannot be reasonably estimated. Therefore, the probability that any outcome is high or low cannot be determined.

Diff: 3 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 28) A manager is more confident of his or her assessment of a situation if it involves risk rather than uncertainty.

Answer: TRUE Explanation: With risk, a manager is able to estimate the likelihood of specific outcomes. With uncertainty, not enough is known even to make estimates. So a manager would be more confident of a position involving risk.

Diff: 3 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 36) Decision making begins with ________.

A) selecting alternatives B) identifying decision criteria C) identifying a problem D) eliminating false alternatives Answer: C

Explanation: C) The process of decision making begins with the identification of a problem. Once the problem has been identified, the decision maker goes through a series of steps to solve the problem. Selecting alternatives is part of the decisionmaking process, but it is a step that comes much later, after criteria have been identified, weighed against one another, developed into alternatives, and analyzed as alternatives. Eliminating false alternatives is something that a decision maker might do, but it is not a recognized part of the process.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 37) Which of the following defines a problem in the decision-making process?

A) a discrepancy between what exists and what the decision maker desires to exist B) a discrepancy between the ideal and the practical C) something that causes irritation D) something that calls for attention Answer: A Explanation: A) Though problems certainly can irritate, and merit attention, these characteristics are not universal enough by themselves to define what a problem is in the decision-making process. In this process, a problem is defined as a discrepancy, or difference between how things are and how the decision maker wants things to be. A problem is not a difference between the ideal and the practical, but rather just a situation in which things are less than satisfactory and the decision maker intends to take action to make them satisfactory.

Diff: 1 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

38) The decision-making process consists of a series of eight steps that identify a problem and work toward ultimately ________.

A) determining if there is a solution to the problem B) solving the problem C) making a plan to solve the problem D) breaking down the problem into a series of steps Answer: B Explanation: B) The goal of the decision-making process is to solve the problem that has been identified. The process assumes that there is a solution to the problem, so determining if there is a solution to the problem is not correct. The process includes making a plan to solve the problem and breaking the problem down into steps.

However, ultimately the decision maker wants to implement the best alternative to solve the problem, then evaluate this alternative to see if it actually resulted in a successful solution.

Diff: 1 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 39) To identify a problem, a manager ________.

A) compares one set of standards or goals to a second set of standards or goals B) looks for unhappy customers C) uses intuition to see that things don't look right D) compares the current state of affairs with some standard or goal Answer: D Explanation: D) A manager compares what she or he has now to some standard or goal to identify a problem. The standard or goal may represent some level of performance from the past, or it could be an as yet unreached level that the manager thinks can be attained. Looking for unhappy customers or using intuition to see when things don't look right may be ways to identify problems but they are not general problem identification methods. Finally, comparing one set of standards or goals to a second set is incorrect because a problem is always identified by comparing an actual state to a standard or goal, not one set of standards or goals to another.

Diff: 1 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

40) A manager can faithfully execute the decision-making process but still end up with nothing of value if ________.

A) he fails to identify the correct problem B) he fails to assign number values to different criteria C) he solves the problem inefficiently D) he fails to correctly identify the steps of the process Answer: A Explanation: A) Assigning number values to decision criteria may often be helpful in the decision-making process, but they are not required for a successful outcome.

Solving the problem inefficiently may not be ideal, but it is not without value.

Identifying the steps of the process has little to do with the success of the process.

That leaves failing to identify the correct problem—it does no good to solve a problem if it is the wrong problem. Solving the wrong problem has no benefit for the organization or its goals.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 41) A manager is considering purchasing new computers for her department. The manager spends time assessing the computers her department now has. Which stage of the decision-making process is she going through?

A) identification of a problem B) identification of decision criteria C) development of alternatives D) implementation of an alternative Answer: A Explanation: A) The first thing the manager needs to do is identify the problem. More specifically, she needs to determine whether she actually has a problem or not. If the computers her department now has are performing satisfactorily, she may decide that she doesn't have a problem and doesn't need to purchase new computers. The other choices—identifying criteria, developing alternatives, or implementing an alternative —all come later in the process, after the manager has determined what her problem is.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

42) A manager is determining what kind of new computers she should purchase for her department. She has made a list of five different computer models for consideration. Which stage of the decision-making process is this?

A) selection of an alternative B) identification of decision criteria C) development of alternatives D) analysis of alternatives Answer: C Explanation: C) Having a list of models means that the manager is beyond identifying decision criteria. She has identified a group of possible choices—in other words, she has developed a list of alternatives. Analysis of the alternatives will be the next step in the process, followed by actually selecting one particular alternative. The manager would have identified decision criteria earlier in the process.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 43) After purchasing new computers for her department, a manager is now comparing the performance of the new computers to the computers they replaced. Which stage of the decision-making process is she carrying out?

A) analysis of alternatives B) evaluation of decision effectiveness C) selection of an alternative D) implementation of an alternative Answer: B Explanation: B) The manager is assessing her decision to purchase new computers.

Was it worth it? This is the final stage of the decision-making process, evaluation of decision effectiveness. Analyzing alternatives, selecting a single alternative, and implementing that single alternative all come earlier in the decision-making process.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

44) For a high-tech bicycle buyer, decision criteria would be determined by ________.

A) whatever most bike buyers recommend B) expert ratings in bike magazines C) technical specifications D) personal preferences of the buyer Answer: D Explanation: D) Criteria are chosen solely on the basis of the priorities of the buyer.

If bike experts consider frame composition a key criterion for choosing a bike but the buyer does not consider it important, then it would be unlikely to be included as a criterion. Similarly, popularity of bike features or technical specifications might enter into the decision-making process, but only if the buyer thought they were important.

In other words, the only factors that are important for selection of decision criteria for a bike buyer are the personal preferences of the buyer.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 45) Which of the following is LEAST likely to be a decision criterion for a high-tech bicycle buyer who cares primarily about performance?

A) warranty B) gear mechanism C) frame composition D) brake assembly Answer: A Explanation: A) A buyer who is looking for performance would care how sturdy and light the frame was and how efficient the gears and brakes were. The warranty does not directly affect performance so it would be least likely to be a decision criterion for the bike buyer.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

46) Which of the following would be a fairly objective criterion by which a bicycle buyer could assess different bike models?

A) handling B) weight C) quality of craftsmanship D) style Answer: B Explanation: B) Of the four choices, only weight can be measured in an objective manner. Handling, craftsmanship, and style all require making subjective judgments about what the buyer likes and doesn't like. Style is largely a matter of taste. Handling and craftsmanship cannot be measured on a simple scale. So "weight" is the correct choice here.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 47) A manager chooses to ignore a rigorous decision-making process and selects TV monitor A over monitor B because he "trusts" company A more than company B. If the decision he made was rational, which of the following is true?

A) Monitor A is really the better choice.

B) The manager should have included "trust" as a criterion.

C) Monitor B is really the better choice.

D) The manager must have made a mistake in calculating his weighted criteria.

Answer: B Explanation: B) There is no way of knowing whether monitor A was really a better choice than B or if the manager made a calculation error. What is true is that the manager should have included "trust" as one of his criteria categories. If trust was an overriding factor, then the manager should have weighted it heavily so it tilted the score toward what his true feelings were. In essence, the manager made a mistake in selecting and weighting criteria.

Diff: 3 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

48) In allocating weights to the decision criteria, which of the following is most helpful to remember?

A) All weights must be the same.

B) The total of the weights must equal 100.

C) The high score should be a 10, and no two criteria should be assigned the same weight.

D) Assign the most important criterion a score, and then assign weights against that standard.

Answer: D Explanation: D) There are no set rules for weighting criteria. All weights can be the same, but in most cases they will be different. Similarly, there is no total amount that all weights should equal. The high score may or may not be assigned a 10, and in many cases two or more criteria can be assigned with the same weight. Only assigning the most important criterion a score and assigning weights against that standard offers helpful advice—measuring each criterion against a standard in most cases will result in a reliable representation of values.

Diff: 3 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 49) What is a heuristic?

A) a complicated and systematic method of decision making B) a purely intuitive method of decision making C) a totally unreliable method of decision making D) a shortcut or rule of thumb that is used for decision making Answer: D Explanation: D) A heuristic is a rule of thumb that allows a decision maker to focus on a few key variables in the process. Heuristics can be useful, so they are not totally unreliable. Heuristics are simple, making a complicated and systematic method of decision making incorrect. Heuristics can be partly intuitive, but they can also be highly rational, making a purely intuitive method incorrect.

Diff: 2 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

50) Because they are not systematic or comprehensive, using heuristics in place of an eight-step decision-making process can lead to ________.

A) errors and biases B) consistently better decisions C) more imaginative decisions D) decisions that more directly solve problems Answer: A Explanation: A) Though heuristics can be very useful in saving time and effort, they can also lead to mistakes, making "errors and biases" the correct response here. There is no evidence that using heuristics results in more imaginative decisions or decisions that solve problems more directly. Finally, since heuristics are known to lead to errors and biases, they clearly do not lead to better decisions, so "consistently better decisions" is incorrect.

Diff: 2 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 51) Which of the following is NOT a reason why managers often resort to using heuristics?

A) They seem to eliminate complexity.

B) They seem to eliminate ambiguity.

C) They save time.

D) They thoroughly explore all alternatives.

Answer: D Explanation: D) The one thing that a heuristic does not do is explore all alternatives for solving a problem. Instead, a heuristic looks at only a small part of the problem and uses key features to arrive at a decision and avoid a complete examination of the options. Heuristics often do successfully seem to make complicated, ambiguous situations easier to understand and deal with, so eliminating complexity and ambiguity are not correct answers. Without a doubt, heuristics save time, which eliminates "saving time" as the correct answer.

Diff: 2 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

52) A banker opts for short-term gain despite indications that his decision might not pay off in the long run. Which error or bias is the banker guilty of?

A) overconfidence B) immediate gratification C) selective perception bias D) representation Answer: B Explanation: B) The correct answer here must be an error or bias that deals with short- and long-term gain. Overconfidence is the tendency of a decision maker to assess his own skills in a more positive light than they deserve, so it has nothing to do with short-term gain. When a person organizes events based on faulty perceptions, he is guilty of selective perception bias, again not directly concerned with short-term gain. Representation bias involves drawing parallels to events that aren't really related, so it is not correct here. Only immediate gratification, which is the tendency to go for a "quick score," involves going for short-term rather than long-term gain, so it is the correct response here.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 53) A scientist cites two studies that show a positive effect for her drug and ignores five other studies that show a negative effect. Which error or bias is she committing?

A) hindsight B) anchoring effect C) confirmation bias D) self-serving Answer: C Explanation: C) The scientist is "cherry picking" data that supports her position and ignoring conflicting data. She is guilty of confirmation bias, seeing only what confirms her preconceived notions. Hindsight would require her to look back on events and claim that they were predictable, something that is not relevant here.

Neither is self-serving, blaming outcomes on outside factors rather than taking responsibility for your own errors. Finally, the anchoring effect describes an individual who fails to adjust to incoming information, again not something that the scientist is doing in this situation.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

54) One legislator sees decreased tax revenue as the key problem in the budget. A second legislator sees increased spending as the problem. Each of these legislators has a(n) ________.

A) representation bias B) self-serving bias C) availability bias D) framing bias Answer: D Explanation: D) A representation bias is a false parallel of current events to other events, something that is not occurring here. A self-serving bias, blaming the situation on outside influences, is also not relevant to this situation. Availability bias occurs when decision makers value only the most recent events that are relevant to the situation, also not occurring here. What is occurring is that the legislators are framing the problem in different ways. This framing results in them coming to very different conclusions about how to solve the problem.

Diff: 2 AACSB: Analytic thinking Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 55) Which of the following is NOT a common decision-making error or bias?

A) sunk costs B) randomness C) forest for the trees D) overconfidence bias Answer: C Explanation: C) All of the choices listed are common decision-making errors and biases except "forest for the trees." Sunk costs refers to managers who fixate on past costs rather than future consequences. Randomness occurs when managers see patterns and trends that do not exist. Overconfidence bias occurs when managers overestimate their own strengths and skills.

Diff: 2 Objective: 4.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

80) Structured problems are ________.

A) ambiguous B) undefined and vague C) clear and straightforward D) incomplete Answer: C Explanation: C) A structured problem involves a clear, unambiguous, well-defined situation in which all information is provided. The essence of a structured problem is that it is straightforward and complete.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 81) Unstructured problems are ________.

A) perfectly rational B) clear and straightforward C) situations in which all options are known D) situations in which all options are not known Answer: D Explanation: D) The essence of an unstructured problem is that information is missing. All alternatives are not known. The problem solver must analyze the situation based on assumptions that may or may not be true. This means that "situations in which all options are not known" is the correct answer. The situation is not perfectly rational or straightforward. Information in an unstructured problem is incomplete, so all options are not known.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

82) Which of the following is an example of a structured problem?

A) designing a new MP3 player B) hiring a lawyer C) deciding shipping options for a vacuum cleaner D) drafting a quarterback for a pro football team Answer: C Explanation: C) A structured problem should be straightforward and clear-cut. Of the four choices, only "deciding shipping options" requires a simple analysis of choices and priorities. The other options—designing a new product, hiring a person to represent you in the legal system, and choosing a football player to lead your team— are much less defined and more open to ambiguity than the correct choice; in other words they are unstructured problems.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 83) Which of the following is an example of an unstructured problem?

A) finding the list price of different copy machines B) choosing the best wardrobe for an executive C) comparing gas mileage for different car models D) measuring pollution levels in a power plant Answer: B Explanation: B) An unstructured problem requires judgment and discrimination among options in a situation in which not all information is available. Only "choosing the best wardrobe for an executive" fits this description, as choosing a wardrobe is a subjective act that can be accomplished in many different ways. The other choices— finding prices, comparing mileage, and measuring pollution—are straightforward and do not include this ambiguous, subjective element, so they are incorrect responses.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

84) Structured problems typically have ________ while unstructured problems typically have ________.

A) only one solution; many solutions B) many solutions; one solution C) many solutions; fewer solutions D) two solutions; three solutions Answer: A Explanation: A) Structured problems, being straightforward, typically have one solution while unstructured problems, being more ambiguous, can have many solutions. "Two solutions and three solutions" stands out here as plausible but it is clearly incorrect since there is no way to quantify the number of solutions to problems in such a definite way.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 85) Programmed decisions work well for solving ________.

A) structured problems B) unstructured problems C) both structured and unstructured problems D) poorly defined problems Answer: A Explanation: A) Programmed decisions are straightforward, routine ways of making decisions so they are best at solving structured problems, which themselves are routine and straightforward. The remaining choice gets eliminated because poorly defined problems fall into the "unstructured" category and would not be effectively solved with a programmed decision-making process.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 86) Programmed decisions draw heavily on which of the following?

A) mistakes made in the past B) past solutions that were successful C) past solutions that were unsuccessful D) innovative, new solutions Answer: B Explanation: B) Though programmed decisions draw on the past, they do not focus on mistakes but rather emulate prior solutions that worked and were successful.

"Innovative, new solutions" is incorrect because programmed decisions are not at all innovative but instead rely on tried and true methods of problem solving.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 87) Which of the following is NOT a type of programmed decision?

A) systematic procedure

B) policy C) brainstorm D) rule Answer: C Explanation: C) Brainstorming is a method of drumming up new ideas for problem solving, not a way to make a programmed decision. The other three choices— systematic procedure, policy, and rule—are recognized as classic ways to make a programmed decision, so they are incorrect responses here.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 88) Following the directions to put together an elliptical exercise machine is an example of which way to solve a problem?

A) procedure B) rule C) general practice D) policy Answer: A Explanation: A) If you could put together the machine with a single action, you would be following a rule. However, assembly is an entire process of following individual instructions, so it is a procedure, not a rule. A policy would require much more interpretation of the situation than simply following instructions.

Diff: 1 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 89) A football coach makes the decision to punt or not to punt on fourth down based on whether he is past his own 50-yard line. Which decision-making method does the coach use?

A) a policy B) a hunch C) a procedure D) a rule Answer: D Explanation: D) The coach's decision is based on a single criterion: is he beyond the 50-yard line? Decision making that relies on a single parameter is rule-following. "A policy" and "a procedure" are not correct because they involve multiple steps and parameters. "A hunch" is not correct because it is not a recognized method of solving structured problems.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 90) Which pair or pairs of terms is/are true? (This question can have more than one correct answer.)

A) structured problem, programmed decision B) structured problem, structured decision C) unstructured problem, programmed decision D) unstructured problem, nonprogrammed decision Answer: A, D Explanation: A) "Structured problem, programmed decision" and "unstructured problem, nonprogrammed decision" are both correct. Structured problems that are straightforward and unambiguous are best solved by routine programmed decisions.

Unstructured problems, on the other hand, require a more creative nonroutine, nonprogrammed decision-making process. Unstructured problem, programmed decision gives pairs that do not match—unstructured problems are not successfully solved by programmed decision making. Finally, "structured problem, structured decision" is wrong because "structured decisions" is not a recognized category of decision.

D) "Structured problem, programmed decision" and "unstructured problem, nonprogrammed decision" are both correct. Structured problems that are straightforward and unambiguous are best solved by routine programmed decisions.

Unstructured problems, on the other hand, require a more creative nonroutine, nonprogrammed decision-making process. Unstructured problem, programmed decision gives pairs that do not match—unstructured problems are not successfully solved by programmed decision making. Finally, "structured problem, structured decision" is wrong because "structured decisions" is not a recognized category of decision.

Diff: 1 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 91) A judge consults guidelines before handing down an award for damages in a legal case. What kind of decision making is she doing?

A) following a policy B) following a rule C) programmed D) following a procedure Answer: A Explanation: A) The judge needs to interpret the situation, so she is following a policy. A rule is much too simple and confined for this kind of decision. The decision is clearly unprogrammed. Finally, the judge must take all kinds of subjective and human elements into account for the case, so "a procedure" is an incorrect choice.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

92) Top managers in an organization tend to ________.

A) make programmed decisions B) solve structured problems C) make nonprogrammed decisions D) solve well-defined problems Answer: C Explanation: C) The higher a manager is in an organization, the more likely it is that he or she will be asked to solve high-level problems. High-level problems are almost always solved by nonprogrammed decision making, so "make nonprogrammed decisions" is the correct answer. The other choices all involve structured problems, so they are not correct responses here.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 93) Which three conditions do decision makers face?

A) certainty, risk, uncertainty B) certainty, uncertainty, confidence C) risk, high risk, low risk D) certainty, risk, high risk Answer: A Explanation: A) The choice indicating "certainty, risk, and uncertainty" represents the correct choice, citing the three recognized conditions that decision makers face.

"Certainty, uncertainty, confidence" is eliminated because confidence is not a recognized decision-making condition. Similarly, the other two choices are wrong because "risk" is the only recognized decision-making category—"high risk" and "low risk" are not recognized.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 94) In a condition of certainty, ________.

A) most outcomes are known B) the decision is already made C) all outcomes of all alternatives are known D) some alternatives are not known Answer: C Explanation: C) Certainty requires that all alternatives are known and all outcomes for those alternatives are also known. This makes the choice indicating "all outcomes of all alternatives are known" the correct choice and the other choices incorrect because the latter limit the number of outcomes or alternatives that are known.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

95) If a car buyer knows the inventory dealer price of the same car at different dealerships, he or she is operating under what type of decision-making condition?

A) risk B) uncertainty C) certainty D) factual Answer: C Explanation: C) The situation described is one of certainty because all outcomes and alternatives are known. Risk would require that the individual needs to make estimates, while uncertainty would mean that the individual would have no confidence in his or her estimation ability for the situation. "Factual" is not a correct choice because it is not a recognized decision-making condition.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 96) A retail clothing store manager who estimates how much to order for the current spring season based on last spring's outcomes is operating under what kind of decision-making condition?

A) seasonal B) risk C) uncertainty D) certainty Answer: B Explanation: B) The ability to make accurate estimates is the critical element in this question. If the manager can make good estimates, he is operating under risk. If all outcomes are known, then certainty would apply, while if the situation is too vague for good estimates, uncertainty would apply. Seasonal is not a recognized decisionmaking condition, so it is incorrect.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

97) ________ is a situation in which a decision maker has incomplete information about outcomes and does not have the ability to reasonably estimate outcomes that are not known.

A) Certainty B) Risk C) Uncertainty D) High certainty Answer: C Explanation: C) Since the decision maker does not know all outcomes, "certainty" can be eliminated here. "Risk" can be eliminated because the decision maker is not able to make good estimates. That means "uncertainty" is the correct response. High certainty is not a recognized category, so it is incorrect.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 98) A low-level manager is most likely to solve problems under which condition?

A) certainty B) low risk C) uncertainty D) low certainty Answer: A Explanation: A) A low-level manager primarily solves structured problems, so he or she will deal with situations of certainty. Low risk and low certainty are not recognized terms, so they are incorrect responses. Uncertainty would apply to decisions made by top managers rather than low-level managers.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 99) A top-level manager is most likely to solve problems under which condition?

A) certainty B) risk C) uncertainty D) high certainty Answer: C Explanation: C) A top-level manager primarily solves unstructured problems, so he or she will deal with situations of uncertainty. Conditions of certainty and risk would be less common for a top-level manager, so these responses are incorrect. High certainty is not a recognized term, so it is an incorrect response.

Diff: 2 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

100) A manager has a choice of three investment funds. To assess them, he looks at their past investment records over the previous five years. The manager is operating under which condition?

A) certainty B) probability C) uncertainty D) risk Answer: D Explanation: D) The manager can use the investment records over previous years to assign probabilities to each fund. That means he is operating under a condition of risk.

Certainty would require that he would know precisely how funds would perform, while uncertainty would mean he would have no way to predict performance.

Probability is not a recognized decision-making condition.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 101) A manager has a choice of three bank CDs that pay different amounts of interest over different time periods. The manager is operating under which condition?

A) jeopardy B) certainty C) uncertainty D) risk Answer: B Explanation: B) The manager knows the exact amounts of interest that the CDs will pay over each time period, so he is operating under a condition of certainty. Risk would require the manager to need to estimate the interest that the funds would generate. Uncertainty would be a condition in which the manager could not even make good estimates for each fund. Jeopardy is not a recognized decision-making condition.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

102) A manager wants to invest in one of three start-up companies. All three of the companies seem to have a good business plan. None of the companies has a track record. The manager is operating under which condition?

A) uncertainty B) certainty C) low certainty D) risk Answer: A Explanation: A) None of the start-ups has a track record, so the manager cannot reasonably assign probable chances of success for any of them. This means that he is operating under a condition of uncertainty. Risk would require that the manager could make reasonable estimates of success for each company. Certainty would mean that the manager would know how each company would fare. Low certainty is not a recognized decision-making condition.

Diff: 2 AACSB: Analytic thinking Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 103) A key to what is commonly used to assess risk is for a decision maker to examine the ________ an investment.

A) promises made by a company for B) ads posted by a company for C) historical data for D) minor details of Answer: C Explanation: C) Of the four choices listed, historical data is most important by far.

Promises made or ads posted by a company are of little value in assessing risk.

Similarly, minor details are usually minor, that is, unimportant, so that choice is incorrect.

Diff: 3 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions

104) Managers in organizations make group decisions ________.

A) frequently B) never C) almost never D) rarely Answer: A Explanation: A) Group decisions are very common in most organizations so "frequently" is the correct response. Group decisions allow the people who will be affected by the decision to take part in the decision. The other choices are incorrect because they do not reflect how common group decision making is.

Diff: 1 Objective: 4.3 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions Fundamentals of Management, 9e (Robbins) Chapter 5 Foundations of Planning 1 18) Strategic management is the act of figuring out how an organization will compete in the marketplace and attract loyal customers.

Answer: TRUE Explanation: Strategic management involves developing an organization's strategies.

Those strategies involve making plans for how an organization will do business and achieve its goals.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 19) The first step in the strategic management process is analyzing the external environment.

Answer: FALSE Explanation: The first step in the strategic management process is for the organization to identify its goals, mission, and strategies. Only then can it move on to start analyzing its external situation.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 20) A mission statement for a kayak manufacturer might be as follows: To make the highest-quality kayaks and sell them at a competitive price.

Answer: TRUE Explanation: A mission statement defines what the organization is in business to do.

This statement clearly states why the kayak company is in business.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

21) An external analysis will identify the threats to a company's well-being, but not opportunities for success.

Answer: FALSE Explanation: An external analysis, the second step in the strategic management process, involves not just identifying threats to an organization but also finding opportunities that the organization can take advantage of.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 22) Core competencies include an organization's major capabilities and its resources.

Answer: FALSE Explanation: Core competencies include the capabilities of an organizational—its skills and abilities only—not its resources.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 23) Capabilities are "what" an organization has; resources are "how" it uses what it has.

Answer: FALSE Explanation: The statement has it reversed. Capabilities are what an organizational can do; resources are strengths and assets that it has.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 24) SWOT analysis includes the identification of an organization's strengths, weaknesses, opportunities, and threats.

Answer: TRUE Explanation: The term SWOT is an acronym for strengths, weaknesses, opportunities, and threats.

Diff: 1 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

25) The final three steps in the strategic management process involve the creation and implementation of strategies for realizing organizational goals.

Answer: TRUE Explanation: The last three steps in the strategic management process are formulating strategies, implementing strategies, and evaluating results. Together, these steps create and carry out strategies that help an organization attain its goals and objectives.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 26) A corporate strategy may be a growth strategy, a stability strategy, or a renewal strategy.

Answer: TRUE Explanation: The three major corporate strategies are growth strategies that focus on expansion, stability strategies that focus on maintaining position, and renewal strategies that focus on fixing problems.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 27) A diversification strategy focuses on a company becoming its own supplier of inputs.

Answer: FALSE Explanation: A company becoming its own supplier describes backward vertical integration, not diversification.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 28) A company with a stability strategy will plan to dramatically increase market share in a highly competitive market.

Answer: FALSE Explanation: A stability strategy would tend to focus on maintaining existing market share rather than increasing market share.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

29) The most drastic renewal strategy an organization can carry out is a retrenchment strategy.

Answer: FALSE Explanation: Retrenchment is less drastic than a turnaround strategy, in which a company takes extreme steps to remake itself.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 30) "A distinctive edge" is a way of describing a competitive advantage.

Answer: TRUE Explanation: Having a competitive advantage means that an organization has some kind of edge on its competition with respect to price, quality, the product itself, or some other characteristic.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 31) Innovation and super-high quality are typically the keys to a cost-leadership strategy.

Answer: FALSE Explanation: Efficiency, rather than innovation or quality, is the key to a costleadership strategy in which a company has lower prices than its competitors.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 32) A focus strategy seeks to appeal to a narrow segment of a market.

Answer: TRUE Explanation: An example of a focus strategy is a super premium ice cream that tries to appeal to a narrow but important segment of the market.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 33) Customer service cannot be considered a strategic weapon for an organization.

Answer: FALSE Explanation: Anything that a company has or does that gives it an edge on its competition qualifies as a strategic weapon. Since customer service can serve as such an edge, it can be considered a strategic weapon.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 34) Xerox Corporation's study of Japanese competitors was the first effort by an

American company at benchmarking.

Answer: TRUE Explanation: Benchmarking involves learning practices from other organizations that can be applied to your own organization. Xerox's managers couldn't figure out how Japanese manufacturers could sell copiers in the United States for considerably less than Xerox's production costs. So Xerox's head of manufacturing took a team to Japan to do a detailed study of its competitors' costs and processes.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 62) The first step in the six-step strategic management process is to ________.

A) analyze the organization's strengths and weaknesses B) identify the organization's mission C) identify strategies to reach the organization's goals D) analyze the opportunities the organization has Answer: B Explanation: B) Identifying the organization's mission is the first step in the strategic management process, making that the correct response. Analysis of strengths, weaknesses, and opportunities are all part of the second and third SWOT analysis steps of the process, while identification of strategies would be included in the fourth step, formulate strategies.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 63) The first three steps of the strategic management process involve ________ strategies.

A) planning B) implementing C) evaluating D) identifying Answer: A Explanation: A) The first three steps of the process include stating the mission of the organization, followed by an analysis of its position (strengths, weaknesses, etc.) in the marketplace. These first three steps are planning strategies, rather than implementation (step 5), evaluation (step 6), or identification (step 4) strategies, making "planning" the correct answer.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 64) A mission statement includes identification of an organization's ________.

A) strengths and weaknesses B) purpose and basic philosophy C) assets and resources

D) resources and strengths Answer: B Explanation: B) Finding the organization's strengths, weaknesses, assets, and resources are all part of an internal analysis, so the choices indicating "strengths and weaknesses," "assets and resources," and "resources and strengths" can be ruled out because they include one or more of those items. That leaves "purpose and basic philosophy" as the correct response, as it correctly identifies that a mission statement should include a description of an organization's purpose as well as a summary of its basic philosophy.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 65) A mission statement does NOT include which of the following?

A) the customers of a company B) major competitors C) why the company is in business and what it hopes to accomplish D) the company's basic beliefs Answer: B Explanation: B) A mission statement should identify an organization's customers, its core philosophy and beliefs, and its basic purpose, so these choices can be eliminated as possible correct responses. The organization's competitors are not part of the organization's basic goals.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

66) An external analysis, the second step of the strategic management process, helps identify ________.

A) the products that a company makes B) the long-term goals of a company C) a company's opportunities and threats D) a company's concern for its employees Answer: C Explanation: C) The focus of an external analysis is to locate the organization's place in the external business environment, analyzing the competition that the organization faces, the opportunities it might take advantage of, and the things that threaten the organization, making "opportunities and threats" the correct response. Long-term goals, product descriptions, and company policy toward its workers have nothing to do with analyzing the external environment, so those choices are ruled out.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 67) An internal analysis, the third step of the strategic management process helps identify ________.

A) opportunities and threats B) resources and capabilities C) opportunities and possibilities D) values and philosophy Answer: B Explanation: B) An organization's values and philosophy are part of its mission statement, not an internal analysis, which rules out that choice as a correct response.

Finding opportunities is part of an external, not an internal, analysis, which eliminates the choices regarding opportunities as correct responses. The internal analysis should identify resources (a company's physical, financial, and human assets) and capabilities (a company's skills and abilities), making "resources and capabilities" the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

68) Which term refers to an organization's capital, workers, and patents?

A) resources B) capabilities C) abilities D) core competencies Answer: A Explanation: A) An organization's workers, patents, and financial capital are all types of assets, or resources that the organization has, making "resources" the correct response. Items such as financial capital do not qualify as capabilities, abilities, or core competencies because they are tangible goods, not abstract abilities.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 69) An organization's resources identify ________.

A) how the organization gets things done B) where the organization operates C) when the organization operates D) what the organization has Answer: D Explanation: D) In informal terms, an organization's resources identify what the organization has, while its capabilities refer to what it does. This means that how, where, or when the organization operates qualify as capabilities, so they can be ruled out as correct responses for this question. Resources are generally tangible assets, while capabilities refer to skills and abilities, making "what the organization has" the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 70) An organization's capabilities identify ________.

A) what the organization knows B) who the organization is C) assets that the organization can rely on D) what the organization can do Answer: D Explanation: D) In informal terms, an organization's resources identify what the organization has, while its capabilities refer to what it does. What the organization has, who it is, or what its assets are refer to what the organization has, so they are all resources, not capabilities. What the organization can do is a capability, so that is the correct response here.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

71) Together, an organization's resources and core competencies make up which of the following?

A) core philosophy B) competitive weapons C) core assets D) fundamental beliefs Answer: B Explanation: B) Finding the organization's strengths, weaknesses, assets, and resources are all part of an internal analysis, so "core philosophy," "core assets," and "fundamental beliefs" can be ruled out because they include one or more of those items. That leaves "competitive weapons" as the correct response, as it correctly identifies that a mission statement should include a description of an organization's products as well as a summary of its basic philosophy.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 72) SWOT analysis identifies and analyzes an organization's ________.

A) strengths, weaknesses, opportunities, and threats B) strategy for competing in the market C) human resource assets D) long-term goals Answer: A Explanation: A) The term SWOT is an acronym for strengths, weaknesses, opportunities, and threats, making that the correct response and eliminating the other choices as possible correct answers.

Diff: 2 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

73) SWOT analysis combines ________.

A) a company's mission with its goals B) external and internal analyses C) a company's philosophy with its ethics D) profit with productivity Answer: B Explanation: B) An external analysis identifies threats to an organization and opportunities that it has. An internal analysis identifies strengths and weaknesses of the organization. Together, these two analyses make up the SWOT items—strengths, weaknesses, opportunities, and threats, making "external and internal analyses" the correct response. SWOT analysis has nothing to do with mission or company philosophy, making these choices incorrect. SWOT does not address profit or productivity, which rules out that choice.

Diff: 2 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 74) Once SWOT analysis is complete, managers ________ to address the issues that came up during the analysis.

A) formulate strategies B) implement strategies C) evaluate strategies D) eliminate strategies Answer: A Explanation: A) The ultimate goal of a SWOT analysis is to come up with strategies that will use an organization's strengths to take advantage of opportunities, defend against threats, and shore up weaknesses, making "formulating strategies" the correct response. Implementation and evaluation of the strategies will come later in the process, making these choices incorrect. Elimination of strategies might be considered a minor part of strategy formulation, but it certainly is not the objective of a SWOT analysis.

Diff: 2 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

75) Which of the following do managers NOT typically use to formulate strategies?

A) finding ways to exploit the organization's strengths B) finding ways to protect the organization from external threats C) finding ways to rule out existing organizational opportunities D) finding ways to correct organizational weaknesses Answer: C Explanation: C) The incorrect choices all identify strategies that might emerge from a SWOT analysis—to exploit organizational strengths, correct weaknesses, and protect against threats, so they can all be ruled out as correct responses. The one thing that organizations would not typically do is rule out possible opportunities—instead the organization would be looking to exploit those opportunities, making "finding ways to rule out existing organizational opportunities" the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 76) The three different types of strategies that managers implement are ________.

A) corporate, private, functional B) corporate, competitive, functional C) long-term, short-term, public D) competitive, noncompetitive, corporate Answer: B Explanation: B) Organizations typically choose corporate, competitive, or functional strategies, making that the correct response. Corporate strategies function on the largest scale, encompassing the entire corporation. Competitive strategies concentrate on strategic business units of a corporation. Functional strategies specialize even more, focusing on individual corporate departments.

Diff: 1 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 77) A corporate strategy focuses primarily on ________.

A) an organization's mission B) an organization's strengths C) an organization's weaknesses D) an organization's people Answer: A Explanation: A) An organization's mission is the primary focus of a corporate strategy, making that the correct response. Strengths, weaknesses, and the people of the organization will certainly be incorporated into the overall corporate strategy, but on their own none of these items represent its primary focus.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 78) Which of the following makes up the three main types of corporate strategies?

A) growth, vertical integration, horizontal integration

B) growth, retrenchment, renewal C) renewal, retrenchment, diversification D) growth, stability, renewal Answer: D Explanation: D) The three basic corporate strategies are termed growth, stability, and renewal, making that the correct response. The choice indicating "growth, vertical integration, and horizontal integration" includes only growth strategies, so it can be eliminated. Both of the remaining choices leave out at least one major corporate strategy and include at least two forms of renewal, making these choices redundant and incorrect.

Diff: 1 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 79) Growth strategies include ________.

A) diversification, concentration, integration, stabilization B) vertical integration, horizontal integration, concentration, diversification C) vertical integration, horizontal integration, lateral integration, horizontal concentration D) integration, allocation, horizontal diversification, vertical diversification Answer: B Explanation: B) The choice indicating "vertical integration, horizontal integration, concentration, and diversification" is the only choice that lists all four types of growth strategy, so it is the correct response. The other choices fail to include all four items and substitute at least one erroneous item.

Diff: 1 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 80) General Mills expanding its line so that it sells several different types of Cheerios is an example of which of the following?

A) concentration B) horizontal integration C) vertical integration D) diversification Answer: A Explanation: A) When a company focuses its attention on a single product or line of products, it is employing concentration as a strategy, making that the correct response.

Integration and diversification are forms of growth by either expanding the control a company has over its operations or combining with other companies—neither of which is being done by General Mills here.

Diff: 3 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 81) A salad dressing company that buys a large olive grove to produce olive oil is practicing which of the following?

A) concentration B) forward vertical integration C) backward vertical integration D) horizontal integration Answer: C Explanation: C) Buying an olive grove is an example of a company trying to become its own supplier, which is termed backward vertical integration. Forward vertical integration involves a company seizing control of its distribution, not its suppliers, so that is not a correct response. Horizontal integration involves combining with competitors, something that is not being done here, so that is incorrect. Finally, "concentration" is incorrect because concentration requires a company to expand on a product or line of products.

Diff: 3 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 82) A sneaker company creating its own stores where it sells only its own brand is an example of which of the following?

A) forward vertical integration B) backward horizontal integration C) forward horizontal integration D) reverse vertical integration Answer: A Explanation: A) The company is taking control of its distribution here, which is an example of forward vertical integration, making that the correct response. "Backward horizontal integration" is incorrect because it would entail taking control of supply, not distribution. Forward horizontal integration would have the company combining with competitors, something that is not being done here, making that choice incorrect.

Finally, reverse vertical integration is not a recognized strategy.

Diff: 3 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

83) In forward vertical integration, a company becomes its own ________, while in backward vertical integration, the company is its own ________.

A) supplier; distributor B) supplier; customer C) distributor; monitor D) distributor; supplier Answer: D Explanation: D) Forward vertical integration involves a company taking control of distribution, while in backward vertical integration, a company takes control of its suppliers. This makes the choice indicating "distributor; supplier" the correct response and eliminates all other responses.

Diff: 2 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 84) Two movie studios combining to form one larger studio is an example of which of the following?

A) forward vertical integration B) horizontal integration C) backward vertical integration D) diversification Answer: B Explanation: B) Each movie studio is combining with a competitor, a clear example of horizontal integration, making that the correct response. Since neither company is taking control of supply or distribution, both forms of vertical integration can be eliminated as correct responses. Horizontal integration differs from diversification in that in diversification the company doesn't combine with competitors but rather makes purchases of supporting industries. Clearly, the studios are combining with competitors here, making "horizontal integration" correct and "diversification" incorrect.

Diff: 2 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

85) Which of the following functional areas has become an important strategic element for companies such as Prada?

A) customer servicer B) cost control and accounting C) human resources D) information technology Answer: D Explanation: D) At Prada's Manhattan flagship store, store designers were hoping for a "radically new shopping experience" that combined "cutting-edge architecture and twenty-first-century customer service." Or at least that was the strategy. Prada invested almost one-fourth of the new store's budget into IT, including wireless networks linked to an inventory database.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 86) When Google purchased YouTube, a company that featured different, but related products, Google was engaging in which of the following?

A) concentration B) forward vertical integration C) backward vertical integration D) diversification Answer: D Explanation: D) Google was clearly not focusing on existing products, taking control of distribution or supply, so those choices can be ruled out as correct responses. What Google was doing was buying a company that it can use to complement or support its existing products. YouTube makes Google a more diversified product, so the purchase is an example of diversification, making that the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

87) Two companies that both sell fine timepieces combine. What are they doing?

A) diversifying, because they both sell the same products B) integrating vertically, because they both sell the same products C) integrating vertically in a backward direction, because they are sharing distribution D) integrating horizontally, because they both sell similar products Answer: D Explanation: D) The merger has nothing to do with controlling supply or distribution, so both vertical integration and backward vertical integration can be eliminated as correct responses. Diversification would require one of the companies to purchase an unrelated company that somehow supports or complements its business, but both companies sell the exact same products, so diversification is not occurring. Instead, the merging of two companies that have the same product is an example of horizontal integration, making that the correct response.

Diff: 3 AACSB: Analytic thinking Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 88) A company whose goal is to retain its ideal size and market share is employing which kind of strategy?

A) noncorporate B) growth C) renewal D) stability Answer: D Explanation: D) A corporate strategy that does not explicitly seek growth is termed a stability strategy, making "stability" the correct response and "growth" incorrect. A renewal strategy would require the company to be in some kind of trouble, so that is not the right answer here. The remaining choice is also not correct because stability clearly is a corporate, not a noncorporate, strategy.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

89) Troubled companies seek ________ to address serious problems.

A) competitive strategies B) corporate strategies C) vertical and horizontal strategies D) renewal strategies Answer: D Explanation: D) The strategies that specialize in fixing troubled organizations are termed renewal strategies, making that the correct response. Competitive, corporate, vertical, and horizontal strategies do not specialize in troubled organizations, so they are incorrect responses.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 90) To address limited, short-term problems, a company is most likely to employ a ________ strategy.

A) retrenchment B) turnaround C) doomsday D) self-critical Answer: A Explanation: A) When the problems of a troubled organization are limited, a retrenchment strategy is typically employed, which helps cut costs and stabilize the company so it can compete successfully, making "retrenchment" the correct response.

When problems are more drastic, a turnaround strategy is employed. Doomsday and self-critical approaches are not recognized renewal strategies, so these choices are incorrect.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 91) A company that is on the verge of collapse or bankruptcy might employ this strategy.

A) retrenchment B) incremental improvement C) turnaround D) hunker down Answer: C Explanation: C) When a company finds itself in truly dire conditions, it goes beyond incremental improvement, "hunkering" down to try to wait out its troubles, or retrenchment. Instead, it employs a turnaround strategy, making that the correct response. A turnaround strategy is a full-fledged reorganization of the entire corporation, making it the most serious remedy for corporate woes.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

92) Remedies that all renewal strategies employ include which of the following?

A) hiring efficiency experts B) new ad campaigns C) emulating competitors D) cutting costs Answer: D Explanation: D) New ad campaigns, efficiency experts, or studying the competition are all possible, but not essential, elements of a renewal strategy. The only recognized essential element of a renewal strategy is to cut costs, making that the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 93) The ________ strategy occupies the level below the corporate strategy.

A) business unit B) competitive C) functional D) performance Answer: B Explanation: B) On an organizational strategies hierarchy chart similar to what is shown in the chapter reading, the top of the hierarchy is occupied by corporate strategies, the second level by competitive strategies, and the third level by functional strategies. This makes "competitive" the correct response and eliminates "functional."

"Business units" and "performance" do not identify recognized corporate strategies, so they are incorrect responses for this question.

Diff: 1 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 94) A diversified corporation is likely to have ________.

A) multiple competitive strategies B) a single competitive strategy C) no more than two competitive strategies D) thousands of competitive strategies Answer: A Explanation: A) A single competitive strategy might exist for a small company that has only one line of business. A large, diversified organization will consist of multiple businesses, so it will have multiple competitive strategies, making that the correct response and ruling out the choices indicating a single or no more than two competitive strategies. It is unlikely that an organization would have thousands of different lines of business, so it would be equally unlikely to have thousands of competitive strategies, ruling out that choice.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

95) The thing that makes your product special is known as your ________.

A) assets B) destruction device C) competitive advantage D) competitive strength Answer: C Explanation: C) A competitive advantage is something that one organization has that other organizations cannot offer. A competitive advantage can be a product, service, or some other quality that sets the organization apart. A company may use its assets or strengths to develop a competitive advantage, but weapons or strengths themselves do not constitute the advantage. "Destruction device" can be ruled out because it is not a recognized term.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 96) Competitive advantages for a high-prestige, premium coffee franchise like Starbucks are likely to include all of the following EXCEPT ________.

A) high quality B) lowest prices C) well-trained employees D) pleasant venues Answer: B Explanation: B) Starbuck's as a premium alternative in the marketplace may offer high-quality coffee, pleasant store fronts, and well-trained employees. However, as a high-prestige choice, the least likely thing for Starbucks to offer would be lowest prices, making that the correct response. Low prices might actually harm the highprestige image that Starbucks tries to project. Note that for some other, nonpremium company, low prices may indeed comprise a competitive advantage.

Diff: 3 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

97) A cost leadership competitive strategy focuses on which of the following?

A) efficiency B) innovation C) elegant design D) luxury Answer: A Explanation: A) A company with a cost leadership strategy is the pacesetter for prices in its competitive market. In order to get the lowest prices, a company typically will eschew elegant design, innovative products, and luxury in favor of efficiency. This makes "efficiency" the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 98) Which of the following would you expect to find in a clothing store that follows a cost leadership strategy?

A) only the finest, most expensive materials B) pampered, personalized service C) state-of-the-art design D) basic, no frills, practical items Answer: D Explanation: D) A company that uses a cost leadership strategy would tend to forego expensive materials, specialized service, and high-tech design and instead focus on practicality. This makes the choice indicating basic, no frills, practical items the correct response, as products for a cost leadership company would most likely be of the "no frills" category.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

99) A company with a differentiation strategy focuses on making its products or services ________.

A) unique and special B) similar to its competitors C) familiar D) affordable Answer: A Explanation: A) The key to a differentiation strategy is for the company to somehow make itself or its products distinct from all of its competitors. This distinction may reside in a product, service, or brand image that sets the company apart from others in the market. These factors make "unique and special" the correct response. Being familiar, similar to competitors, or affordable would have little value to a company that uses a differentiation strategy as none of these qualities makes its products different or distinguished.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 100) A differentiation strategy ________.

A) usually focuses on price B) must focus on price C) can focus on a brand image D) can focus on value, but not service Answer: C Explanation: C) A company with a differentiation strategy tries to make its products and services distinct and different, so price would not typically be part of the approach. Service can function as something that differentiates the company, so the choice indicating "focus on value, but not service" cannot be a correct response.

Surprisingly, brand image can be the determining factor for a differentiation strategy.

Though hard to establish, once it exists, a unique and special brand name can distinguish a company from all of its competitors.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

101) A company that looks for a niche in the market is following which strategy?

A) cost leadership B) differentiation C) focus D) turnaround Answer: C Explanation: C) The key to a focus strategy is for a company not to try to appeal to a broad market, but rather to find a narrow niche in the market and serve it with something extraordinary and special. This makes "focus" the correct response and eliminates "differentiation" and "cost leadership" as possible correct responses because both try to appeal to broad audiences. A turnaround strategy is a corporate rather than a competitive strategy, so that choice is not correct.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 102) Which of the following describes a company that is following a focus strategy?

A) a software company that makes a wide variety of games and financial products B) a software company that makes games for a wide audience C) a software company that makes financial products for accountants, consumers, and businesses D) a software company that makes financial products for accountants only Answer: D Explanation: D) The correct answer for this question is the choice that describes a product that serves the narrowest and most specialized audience. The two choices regarding a wide variety of games and a wide audience identify broad audiences, so they are incorrect. The choice regarding making financial products for accountants among others and the choice regarding making financial products for accountants only refer to making only financial products, whereas the company serving only accountants serves a more narrow market segment, so it is the correct response.

Diff: 3 AACSB: Use of information technology Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

103) According to Michael Porter, a company with good products that has no clear competitive advantage is said to be ________.

A) perfectly positioned B) stuck in the middle C) in the wheelhouse D) outside of the box Answer: B Explanation: B) Porter's phrase "stuck in the middle" describes a company that has no clear edge over its competitors, so "stuck in the middle" is the correct response for this question. A company may be efficient, innovative, and produce high-quality products, but if it cannot establish some kind of significant advantage over its rivals, it will remain "stuck."

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 104) Most successful companies find that ________ a competitive advantage is almost as difficult as developing a competitive advantage.

A) assessing B) sustaining C) modifying D) eliminating Answer: B Explanation: B) Once a company establishes its competitive advantage, you might think that it would be able to rest on its achievement. In fact, today's world is so competitive that few companies can do this. Once they gain an advantage they need to work hard to keep that advantage as rivals scramble to reduce the company's edge or develop an edge of their own. These factors all make sustaining a competitive advantage the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

105) All of the following are threats to a sustainable, long-term competitive advantage EXCEPT ________.

A) market stability B) market instabilities and disturbances C) evolution of the industry D) new technology in the industry Answer: A Explanation: A) Instability, new technology, and an evolving industry all can function to erase the edge a company has and threaten its competitive advantage. "Market stability" is the only choice that is not a threat to an established edge, since the edge is likely to persist as long as conditions don't change, making "market stability" the correct response.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 106) To gain a sustainable competitive advantage, a pharmaceutical company might ________.

A) market aggressively B) set high prices for its products C) secure exclusive rights to produce a drug D) produce as many generic drugs as possible Answer: C Explanation: C) Marketing aggressively might minimally help the company in gaining an advantage, but it probably would not be effective enough to make any advantage permanent or sustainable. Setting high prices or making generics might reduce a company's competitive advantage, so those choices can be eliminated. The one thing that might help the company sustain its advantage would be to gain exclusive rights to a successful drug. Since no other company could produce that drug, the monopoly that the company would have would constitute a sustainable competitive advantage—at least as long as the rights remained exclusive.

Diff: 3 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

107) A company's strategic weapon is any product, service, or other attribute it has that ________.

A) gives it an edge over its competitors B) identifies problems that the company has C) identifies the potential of employees D) helps diversify the company Answer: A Explanation: A) A strategic weapon is some kind of asset or ability that a company can use to gain an advantage in the marketplace. For example, a strategic weapon that Apple has is its ability to innovate. When Apple needs to try to gain in the market, it looks to innovation above all other characteristics for its edge. These factors make the choice regarding giving it an edge over competitors the correct response and eliminate the other responses.

Diff: 2 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies 108) To create a competitive advantage that is sustainable, a company can begin by focusing on quality, then ________ A) make sure quality doesn't decline at too rapid a pace B) make incremental improvements to keep quality levels high C) change its entire product line frequently D) slowly diminish quality and raise the prices of its products Answer: B Explanation: B) Diminishing quality would be likely to erode a competitive advantage, not make it more sustainable. Changing a successful formula would also tend to be counterproductive, making "change its entire product line frequently" incorrect. The only effective strategy would be to refuse to let well enough alone— keep the same product, but keep improving the product to stay ahead of rivals— making the choice regarding incremental improvements the correct response.

Diff: 3 Objective: 5.2 Learning Outcome: Identify the steps of the strategic management process and describe common organizational and business strategies

109) This term describes an electric shaver company that carefully observes its competitor's production line to look for ways to improve its own manufacturing process.

A) trademarking B) benchmarking C) quality engineering D) reverse marketing Answer: B Explanation: B) The practice of learning production techniques and similar practices from other organizations is called benchmarking. Note that a company can successfully benchmark in a completely unrelated industry. A car company, for example, might observe a shipping company for clues about improving efficiency.

Diff: 2 Objective: 5.2 Learning Outcome: Discuss the processes and tools of developing different types of plans Fundamentals of Management, 9e (Robbins) Chapter 6 Organizational Structure and Design 1) Organizational design is the process in which managers change or develop an organization's structure.

Answer: TRUE Explanation: By definition, organizational design requires a manager to develop an organization's structure, or change the structure in some way.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 2) There are four basic elements in organizational structure.

Answer: FALSE Explanation: There are six elements: work specialization, departmentalization, authority and responsibility, span of control, centralization and decentralization, and formalization.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 3) The original ideas about organizational design formulated by Fayol and Weber are now largely obsolete.

Answer: FALSE Explanation: Surprisingly, many of the ideas of Fayol and Weber about organizational design are still valid today.

Diff: 2 Objective: 6.1 Learning Outcome: Summarize the major historical and current approaches to management 4) When work specialization originally began to be implemented early in the twentieth century, employee productivity initially rose.

Answer: TRUE Explanation: Initially, managers saw huge increases in productivity as a result of specialization. However, when work became overly specialized, employee morale and motivation dropped, erasing many productivity gains.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 5) Today, most managers see work specialization as a source of ever-increasing productivity.

Answer: FALSE Explanation: Today, managers see a limit to the amount of productivity increase they can see from specialization. Specialization that is not deadening to employees tends to work best. Monotonous assembly-line work seems to have diminishing returns.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 6) The advantage of work specialization is that it always results in high employee motivation and high productivity.

Answer: FALSE Explanation: The opposite occurs—too much work specialization results in lower motivation and productivity.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 7) Departmentalization is how jobs are grouped.

Answer: TRUE Explanation: The grouping of jobs along lines of function, product, and other criteria defines departmentalization.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 8) Staff authority is the ability to direct the work of any employee who does not have a higher rank in the organization.

Answer: FALSE Explanation: Staff authority is authority over support staff only, not general employees. Thus, a payroll manager has authority over payroll staff but not other organizational employees.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 9) Grouping jobs on the basis of major product areas is termed customer departmentalization.

Answer: FALSE Explanation: Grouping along the lines of product areas is termed product departmentalization, not customer departmentalization.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 10) Line authority can be exerted only after a manager checks with his or her superior.

Answer: FALSE Explanation: Line authority does not require checking with superiors. It can be exerted as the manager sees fit without any kind of consultation.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

11) Unity of command prevents an employee from trying to follow two conflicting commands at once.

Answer: TRUE Explanation: The original management theorists stated that subordinates should not be put in the position to try to follow two or more conflicting commands at once.

Unity of command ensures that the command from the highest organizational level is followed.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 12) Power is a right that a manager has when he or she has a higher rank in an organization.

Answer: FALSE Explanation: Power can arise from rank, but it also can arise from a particular skill, knowledge, or access within the organization. For example, the boss's secretary has power to gain access to the boss without having a high rank in the organization.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 13) When decisions tend to be made at lower levels in an organization, the organization is said to be centralized.

Answer: FALSE Explanation: Centralized decisions originate at higher rather than lower levels of an organization.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 14) Traditional organizations are structured in a pyramid, with the power and authority located in the pyramid's broad base.

Answer: FALSE Explanation: The power and authority in a traditional organization resides at the narrow point of the pyramid where top management is located, not the base.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 43) Organizational design requires a manager to ________.

A) organize groups within an organization B) change the culture of an organization C) change or develop the structure of an organization D) change the logo of an organization Answer: C Explanation: C) By definition, organizational design requires that an individual develop or change an organization's structure. Changing organizational culture or organizing groups may influence structure in minor ways, so those choices are incorrect. Changing the logo of the organization also does not constitute creating or

significantly modifying the organization's structure.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

44) All of the following are part of the process of organizational design EXCEPT ________.

A) deciding how specialized jobs should be B) determining rules for employee behavior C) determining the level at which decisions are made D) determining goals for the organization Answer: D Explanation: D) Organizing jobs, formulating rules, or clarifying a decision-making process are clearly examples of developing an organization's structure. Determining goals is part of establishing an organization's mission, not creating its structure that will help carry out that mission.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 45) Which of the following are NOT basic elements of organizational structure?

A) work specialization, span of control B) chain of command, line authority C) centralization, decentralization D) departmentalization, formalization Answer: B Explanation: B) The six elements of organizational structure are given in the three incorrect choices: work specialization, span of control, centralization, decentralization, departmentalization and formalization. Chain of command and line authority are not included as basic elements of organizational structure, so "chain of command, line authority" is the correct response.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 46) Which of the following is synonymous with work specialization?

A) division of labor B) job discrimination C) chain of command D) job preference Answer: A Explanation: A) Division of labor is the only term among the four choices that describes how work is specialized. Job discrimination describes how employees are mistreated in the job market. Job preference describes how employees select jobs.

Chain of command describes authority relationships in organizations.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

47) Which statement accurately defines work specialization?

A) It is the degree to which tasks are grouped together.

B) Individual employees specialize in doing part of an activity rather than the entire activity.

C) Jobs are ranked relative only to their worth or value to the businesses.

D) Work specialization clarifies who reports to whom.

Answer: B Explanation: B) The choice regarding the degree to which tasks are grouped together describes departmentalization, not specialization. The choices regarding ranking jobs and work specialization both describe a power relationship in an organization, so they are incorrect. The choice regarding individual employees accurately identifies the idea that work specialization requires dividing a task into parts, so it is the correct response.

Diff: 3 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 48) Early supporters of work specialization saw it as ________.

A) a reliable way to increase productivity B) a good way to increase employee morale C) a source of innovation D) an immoral way to coerce workers into greater productivity Answer: A Explanation: A) Work specialization has never been seen as a way to increase productivity or innovation. Work specialization was seen as an excellent but ultimately limited way to increase productivity, so "a reliable way to increase productivity" is the correct response.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 49) Early users of work specialization in the early twentieth century found that the practice ultimately resulted in ________.

A) higher profits and better employee morale B) bored workers with low morale C) huge and permanent productivity gains D) better communication among employees Answer: B Explanation: B) While managers initially saw profit and productivity gains in work specialization, the gains were not huge, not permanent, and not accompanied by increases in morale, so these choices are incorrect. Better communication was never observed by managers so that choice is incorrect. After initial gains, managers did see an inevitable drop in morale of employees as they contended with drudgery, making "bored workers with low morale" the correct response.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

50) Today, managers favor this approach instead of work specialization.

A) All tasks are performed by all employees.

B) Partners switch jobs every half hour.

C) Employees perform a broad range of tasks.

D) Monotonous tasks are shared by all employees.

Answer: C Explanation: C) Today's managers prefer an approach in which employees perform many tasks, eliminating monotony. The other choices given here have been tried in isolated cases, but none constitutes a prevalent approach of today's managers.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 51) Functional departmentalization groups jobs by ________.

A) tasks they perform B) territories they serve C) products or services they manufacture or produce D) type of customer they serve Answer: A Explanation: A) The choice regarding territories describes geographic departmentalization, while the choice regarding products or services describes product departmentalization, and the choice regarding type of customer describes customer departmentalization. That makes "tasks they perform" the correct response, as functional departmentalization groups employees by the jobs they perform.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 52) ________ departmentalization is based on territory or the physical location of employees or customers.

A) Functional B) Product C) Geographic D) Matrix Answer: C Explanation: C) Among the four choices, only "geographic" refers to territory, so "geographic" is the correct choice.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

53) A soap company that features a bath soap department, a laundry detergent department, and a dish soap department is using which of the following?

A) process departmentalization B) functional departmentalization C) product departmentalization D) customer departmentalization Answer: C Explanation: C) The soap company clearly is organizing by product, not a particular process, the job people do, or the customer that is served. That makes "product departmentalization" the correct response.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 54) What kind of departmentalization would be in place in a government agency in which there are separate departments that provide services for employers, employed workers, unemployed workers, and the disabled?

A) product B) geographic C) outcome D) customer Answer: D Explanation: D) Employed workers, unemployed workers, employers, and disabled workers are categories of people who will use the agency's services—its customers.

Therefore, "customer" is correct and the other choices incorrect.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 55) State motor vehicle offices usually use this kind of departmentalization.

A) product B) functional C) customer D) process Answer: D Explanation: D) Motor vehicle offices organize, for example, by the process of getting a driver's license. First the customer fills out forms, then takes an eye test, then takes a written test, and so on. This makes "process" correct.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

56) The line of authority that extends from the upper levels of management to the lowest levels of the organization is termed the ________.

A) chain of responsibility B) unity of command C) staff authority D) chain of command Answer: D Explanation: D) Unity of command refers to a single authority prevailing when organizational conflicts arise rather than a hierarchical authority. Staff authority refers to the authority that staff managers have over support personnel. Only the chain of command describes the hierarchical relationship between levels of an organization with respect to authority, so that is the correct response. "Chain of responsibility" is incorrect because it is not a recognized term.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 57) The chain of command answers this question.

A) Where do I go for help?

B) How do I know when the task is complete?

C) What are the rules?

D) Who reports to whom?

Answer: D Explanation: D) The classic description of the chain of command is that it determines who reports to whom. The other questions given here—asking for help, knowing when work is complete, and learning the rules—do not explicitly involve authority, so they are incorrect.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 58) Authority gives an individual the right to do this.

A) give orders B) reprimand employees C) command respect D) obey orders Answer: A Explanation: A) Authority confers the right to direct subordinates and, if necessary, issue commands and orders, making "give orders" the correct response. Reprimanding may be done by superiors to subordinates, but it is not an explicit part of authority.

Commanding respect is completely independent of authority—although practically speaking, authority is hard to establish without it. Finally, all employees have the "right" to obey orders, not just a person with authority, making "obey orders" incorrect.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

59) In the chain of command, each person above you ________.

A) has special privileges B) receives higher pay C) has line authority D) has no right to give you orders Answer: C Explanation: C) Line authority is the explicit right to issue orders to a subordinate.

People of higher rank may or may not receive special privileges or more pay than people below, so those choices are incorrect. Finally, "has no right to give you orders" can be eliminated because it is the opposite of the correct answer.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 60) Staff managers have authority over ________.

A) special support employees only B) line managers C) middle managers D) the person above them in the chain of command Answer: A Explanation: A) Staff managers have authority only over the special support staff they control. Staff managers typically do not exercise authority over other employees, even if they outrank them. This makes "special support employees only" the correct response and the other three choices incorrect because they all identify people other than support staff.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 61) Line authority gives a manager the ability to direct the work of ________.

A) any employee in the firm B) any subordinate C) any subordinate, after consulting with the next higher level D) only subordinates one level down Answer: B Explanation: B) Line authority is the explicit right to issue orders or direct the activities of any subordinate. Line authority confers this right to a manager without any prior consultation with higher-ups. This makes "any subordinate" the correct response. "Any subordinate, after consulting with the next higher level" is incorrect because line authority extends only downward, not up to higher-ranking individuals.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

62) ________ prevents a single employee from getting conflicting orders from two different superiors.

A) Line authority B) Unity of command C) Staff authority D) Chain of command Answer: B Explanation: B) Chain of command, line authority, and staff authority are involved in determining how organizational orders and discipline are handled. However, only unity of command deals explicitly with resolving conflicting orders, so it is the correct response.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 63) The importance of unity of command has diminished in today's workplace because of its tendency to be ________.

A) inflexible and inefficient B) ethically questionable C) chauvinistic and dictatorial D) too decisive Answer: A Explanation: A) Unity of command is a principle that establishes absolute authority of the superior in an organization. In today's workplace, flexibility is valued over authority so unity of command has been downgraded. This makes "inflexible and inefficient" the correct response. Unity of command is not ethically questionable, so that choice can be eliminated. Similarly, though there may be an element of veracity in the remaining two choices, they can both be ruled out since being dictatorial or overly decisive are not causes of the diminution of unity of command.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 64) Which of the following statements is true?

A) Power is a right.

B) Authority is one's ability to influence decisions.

C) Authority is a right.

D) Both power and authority are rights.

Answer: C Explanation: C) The choices indicating that power is a right and authority is one's ability to influence decisions have the facts reversed. Power, not authority, is the ability to influence decisions, and authority is a right. That makes the choice indicating that authority is a right the correct response and also rules out the remaining choice since authority alone is a right.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

65) ________ is the obligation or expectation to perform a duty.

A) Responsibility B) Unity of command C) Chain of command D) Span of control Answer: A Explanation: A) By definition, responsibility is the obligation to perform duties that have been assigned, so that is the correct choice. An employee's responsibility is to complete the task that he or she has been assigned. Two of the other choices here, "unity of command" and "chain of command," refer to giving and following orders, so they can be eliminated. Span of control refers to the number of employees who report to a manager, so it also is an incorrect choice.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 66) The personal secretary of a top manager may have ________.

A) power but not authority B) authority but not power C) power and authority D) line authority but not staff authority Answer: A Explanation: A) A secretary who controls access to the boss wields power in his or her ability to grant people entrance, but he or she does not have authority to issue orders or assignments. Therefore, the secretary has power without authority. This makes "power but not authority" the correct choice and renders the other three choices incorrect.

Diff: 3 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 67) Which of the following statements is true?

A) Power is a type of authority.

B) Authority and power are identical.

C) Authority is a type of power.

D) Power is determined by horizontal position in an organization.

Answer: C Explanation: C) Authority is a subset of power. Authority is the power to give orders and make assignments. This makes "authority is a type of power" the correct choice and causes "power is a type of authority" and "authority and power are identical" to be incorrect because neither one of them identifies authority as a type of power. Finally, "power is determined by horizontal position in an organization" is incorrect because power is determined by both the horizontal and vertical position of a person in an organization.

Diff: 3 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

68) As represented in a power cone, power is based on ________.

A) vertical position only B) horizontal position only C) distance from the center only D) vertical position and distance from the center Answer: D Explanation: D) Vertical position by itself determines authority, not power, so "vertical position only" is incorrect. Horizontal position on its own determines neither power nor authority, so "horizontal position only" is incorrect. Distance from the center only partly defines power, so that choice is incorrect. The remaining choice gives the correct relationship: power is determined by both vertical position and the distance from the center power core of the diagram.

Diff: 3 AACSB: Analytic thinking Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 69) As represented in a hierarchical organization diagram, authority is based on ________.

A) vertical position only B) horizontal position only C) distance from the center only D) horizontal and vertical position Answer: A Explanation: A) In a hierarchical organization diagram, vertical position is a measure of authority. The person at the top, therefore, has the most authority and the person on the bottom the least, making "vertical position only" the correct choice. The three other listed possibilities feature a horizontal dimension, so they are incorrect.

Diff: 3 AACSB: Analytic thinking Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 70) A construction site supervisor who sees an impending thunderstorm and tells workers to go home is demonstrating ________.

A) line authority B) staff delegation C) provisional accountability D) responsibility Answer: A Explanation: A) This is a perfect example of line authority: the supervisor is exercising the authority to make a decision and give an order to subordinates without consulting any of his superiors. This makes "line authority" correct and rules out the other three choices.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

71) ________ is the power that rests on the leader's ability to punish or control.

A) Reward power B) Coercive power C) Expert power D) Referent power Answer: B Explanation: B) Coercive power is the power that comes from fear, so the ability to punish or control is a coercive power. This makes "coercive power" correct. The leader is not using expertise, access, or some kind of premium or bonus to influence others, so these choices are incorrect.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 72) A bank manager who passes out bonuses at the end of the year is exercising this.

A) reward power B) coercive power C) expert power D) referent power Answer: A Explanation: A) A bonus is a type of reward, so the manager is exercising reward power. The power is not based on fear (coercive power), expertise, or knowing someone (referent power), so none of these choices is correct.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 73) Your firm's attorney has ________ power when giving legal advice.

A) legitimate B) status C) expert D) coercive Answer: C Explanation: C) Legal advice is a type of expertise, so "expert" is the correct response. The attorney's power is not based on fear, so "coercive" is incorrect.

"Legitimate" and "status" are both incorrect because they refer to a type of hierarchical power, not power that comes from expertise.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

74) ________ is the power that arises when a person is close to another person who has great power and authority.

A) Expert power B) Referent power C) Reward power D) Legitimate power Answer: B Explanation: B) The boss's secretary is a classic case of referent power—his or her power is based on the ability to give access to an important person, the boss. This makes "referent power" the correct response. The other three choices are incorrect because none of the three describes the power that comes from proximity and access to a person who has power or resources.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 75) When a top manager decides to hire an individual over the objections of her staff, she is exercising which kind of power?

A) referent B) expert C) coercive D) legitimate Answer: D Explanation: D) When the manager does what she wants over the objection of subordinates, she is exploiting her position of authority in the vertical organizational hierarchy—in other words, she is using legitimate power. None of the other choices refers to the vertical power that comes from one's position in the corporate pyramid.

Diff: 3 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 76) The traditional view holds that managers should not directly supervise more than ________ subordinates.

A) three or four B) five or six C) seven or eight D) nine or ten Answer: B Explanation: B) Classical studies and observations limited the number of employees under a single manager to six, making five or six correct. This view has recently evolved. As organizations become more sophisticated and workers become better trained and more accountable, the span of control has increased in size.

Diff: 1 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

77) Modern managers find that they can ________ if their employees are experienced, well-trained, and motivated.

A) increase their span of control B) decrease their span of control C) eliminate their span of control D) fluctuate their span of control Answer: A Explanation: A) Having eager, well-trained, experienced employees seems to be the key to increasing span of control. In a sense, the manager oversees a group of "selfmanaged" individuals who are almost equal to him- or herself in accountability and responsibility. In addition, many of his or her charges may have skills, knowledge, or insights that actually surpass the manager's own abilities.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 78) A traditional "top down" organization is ________ organization.

A) a largely centralized B) a largely decentralized C) an absolutely decentralized D) an absolutely centralized Answer: A Explanation: A) By definition, a centralized organization is one in which decisions are issued from the top. This makes "largely centralized" the correct choice and "largely decentralized" and "absolutely decentralized" incorrect because they refer to decentralized rather than centralized structure. Finally, "absolutely centralized" is not correct because no organization is completely centralized or decentralized. All organizations are somewhere in the middle of the two extremes.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

79) ________ reflects the degree to which decision making is distributed throughout the hierarchy rather than concentrated at the top.

A) Centralization B) Span of control C) Concentration D) Decentralization Answer: D Explanation: D) By definition, decentralization refers to the opposite of top-down decision making: the more decentralized decisions in an organization are, the less often they are made by top managers and filter down from above. When decision making is distributed throughout the hierarchy, it is decentralized, making "decentralization" the correct response. Obviously, "centralization" is incorrect here.

"Span of control" and "concentration" also are wrong because neither span of control nor concentration refers to decision making that comes from all levels of an organization.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 80) In recent years, organizations have become more ________ to be responsive to a dynamic business environment.

A) centralized B) decentralized C) structured D) mechanistic Answer: B Explanation: B) The fast-changing business environment of today has made managers seek to be more flexible. A decentralized structure that can effect change from any position in the hierarchy without waiting for a centralized top-down decree is therefore favored by managers seeking flexibility. This makes "decentralized" the correct response and rules out the other three choices, all of which identify inflexible rather than flexible decision making.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions

81) In today's decentralized business world, ________ the most important strategic decisions.

A) top managers still primarily make B) middle managers make C) lower-level managers D) nonmanagerial employees Answer: A Explanation: A) Though decentralization has increased greatly in the recent past, the truly important decisions in most organizations are still made by top managers. The decisions that middle managers, lower managers, and nonmanagers make are usually of a tactical nature and do not affect the direction in which the organization is headed.

Diff: 2 Objective: 6.1 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 82) All of the following are characteristics of a highly formalized organization EXCEPT ________.

A) explicit job descriptions B) little discretion for employees C) minimum number of rules D) a standardized way of doing things Answer: C Explanation: C) A formalized organization is very precise and bureaucratic. Jobs are precisely defined; employees are given little leeway in how they carry out tasks, rules are given great emphasis, and most activities are routine and standardized. Since rules are important in this kind of an organization, you would not expect a minimum of rules, making it the correct response.

Diff: 2 Objective: 6.1 Learning Outcome: Discuss factors influencing organizational structure decisions 83) Today's managers are moving away from formalization and trying to be this.

A) more rigorous B) more flexible C) more strict D) less permissive Answer: B Explanation: B) Today's managers, if anything, are getting less strict and more permissive, making "more strict" and "less permissive" incorrect. "More rigorous" is wrong simply because rigor has not been identified as a current trend among managers. The correct choice identifies flexibility as the key to dealing with a fastchanging economic environment.

Diff: 2 Objective: 6.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

84) Today's managers expect employees to ________.

A) ignore rules for the most part B) use discretion when it comes to following rules C) faithfully follow rules even when it may harm the organization D) make their own rules Answer: B Explanation: B) Rules have been de-emphasized in today's business environment, but not forgotten. This rules out ignoring rules and faithfully following rules as the correct answer. Managers don't want to go so far as having employees make their own rules, which eliminates that choice. The correct response is using discretion, which reflects a decentralized view of management in which employees participate in decision making —including the decision to interpret rules.

Diff: 2 Objective: 6.1 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization Fundamentals of Management, 9e (Robbins) Chapter 7 Managing Human Resources 1) Human resource management involves training, motivating, and retaining competent employees.

Answer: TRUE Explanation: HRM is defined as the function that identifies, selects, trains, motivates, and retains employees who are competent and productive.

Diff: 1 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process 2) Human resource management activities such as hiring and downsizing are the sole responsibility of the human resource department.

Answer: FALSE Explanation: Many small businesses function without HR departments. Many larger organizations involve non-HR managers in human resource decisions, and in some cases these managers are in charge of the process.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process 3) Human resource management is about hiring and firing only.

Answer: FALSE Explanation: HRM is not just about hiring and firing. In addition to hiring and firing, HR managers must train employees to become productive workers, assess and compensate employees appropriately, and handle overall employment planning goals for an organization, including assessing current needs and estimating future human resource needs.

Diff: 2 Objective: 7.1

Learning Outcome: Identify and discuss the components of the human resource management process 4) The most important environmental force that affects HRM is the legal environment.

Answer: TRUE Explanation: Employment and discrimination laws play an enormous role in how HR managers hire. HR managers must be fully versed in both federal and state laws to function effectively.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process

5) A community fire department can legally deny employment to a firefighter applicant who is confined to a wheelchair.

Answer: TRUE Explanation: This statement is true only if the job requires physical abilities that could not be performed from a wheelchair. A fire department would not be allowed to deny employment to a wheelchair-bound person for a desk job in the department, for example.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 6) Employers cannot legally discriminate with regard to race, sex, or religion, but there are no laws against denying employment because of age.

Answer: FALSE Explanation: The Vocational Rehabilitation Act specifically prohibits denying employment because of age.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 7) Employees in Mexico are less likely to belong to a union than employees in the United States.

Answer: FALSE Explanation: Union membership is more common in Mexico than it is in the United States.

Diff: 1 AACSB: Dynamics of the global economy Objective: 7.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 8) Western European countries differ from U.S. companies in that they have work councils that must be consulted on personnel decisions.

Answer: TRUE Explanation: Work councils in Germany and other European countries are part of a practice called representative participation. Work councils confer with HR departments in matters that involve hiring and firing, giving employees a voice in these critical decisions.

Diff: 2 AACSB: Dynamics of the global economy Objective: 7.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management

9) Employment planning includes two steps: assessing current human resources needs and developing a plan to meet those needs.

Answer: TRUE Explanation: Employment planning involves evaluating whether the organization needs more or fewer employees, then making a plan to meet those needs and reach an optimum employee level.

Diff: 2 Objective: 7.2 Learning Outcome: Identify and discuss the components of the human resource management process 42) The first three activities of the human resource management (HRM) process are about ________.

A) recruiting B) planning C) training D) downsizing Answer: B Explanation: B) The first three steps of the HRM process are about planning, making that the correct response for this question. Managers first determine needs for workers. Then, depending on the situation, they either recruit or downsize. Training comes after selection and hiring, so that is an incorrect response for this question.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process 43) Human resource management is concerned with ________ competent employees.

A) obtaining B) obtaining, training, motivating, and retaining C) obtaining, training, and motivating D) training and keeping Answer: B Explanation: B) The correct choice identifies all four functions of HRM. HRM is concerned not only with getting employees, but also training and motivating them after they are hired so they are likely to be high performers and stay with the organization. The other choices leave out at least one primary function of HRM so they are incorrect choices.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process

44) For the most part, ________ are involved in HR decisions within their own department or unit.

A) very few managers B) some managers C) most managers D) all managers Answer: D Explanation: D) To some degree, all managers participate in hiring, firing, and other HR decisions at least within their own units or departments, making "all managers" the correct response. Managers tend to participate in the hiring process, for example, because they have a lot at stake—they are the ones who are going to deal directly with the employees who get hired. The other choices all refer to quantities that are fewer than "all managers," so they are incorrect answers.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process 45) Separate HRM specialists are least common in these types of organizations.

A) small B) large C) multinational corporations D) non-profit Answer: A Explanation: A) Having no HRM staff support is most common in small organizations that don't have the resources for individuals or departments to devote time exclusively to HRM, making "small" the correct response. In these organizations, managers themselves typically take on HR tasks. Large organizations and multinational corporations typically possess the size and manpower to have HRM specialists, so "large" and "multinational corporations" are incorrect. Non-profit organizations may be large or small, so "non-profit" cannot be the best answer for this question.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process

46) Employment planning involves ________.

A) addition of staff only B) addition of staff and reduction of staff only C) addition of staff, reduction of staff, and selection only D) addition of staff, reduction of staff, motivation of staff, and selection Answer: C Explanation: C) The correct choice correctly identifies all of the activities involved in employment planning. The choices indicating "addition of staff only" and "addition of staff and reduction of staff only" leave out one or more of the activities, so they are incorrect. The remaining choice adds motivation of staff, an activity that is not included in employment planning, so it is an incorrect choice.

Diff: 2 Objective: 7.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 47) This is the goal of employment planning.

A) selecting competent employees B) obtaining competent employees with up-to-date skills C) obtaining competent and high-performing employees D) selecting high-performing employees only Answer: A Explanation: A) The goal of employment planning is modest: to identify and select competent employees only. Providing the employees who are selected with up-to-date skills or the ability to perform at a high level are goals of the orientation and training process, so they are not correct responses for this question.

Diff: 2 Objective: 7.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 48) The last steps of the HRM process deal with ________.

A) performance and compensation B) training and compensation C) compensation only D) skills Answer: A Explanation: A) The last steps in the HRM process identify performance goals, performance problems, and compensation. This makes "performance and compensation" the correct response and eliminates the choices indicating training and compensation and skills because training and skills come earlier in the HRM process.

"Compensation only" is not a correct response because the last two steps not only deal with compensation, they also deal with performance.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process

49) The most important environmental factor in the HRM process is ________.

A) the business environment B) the natural environment C) the legal environment D) the scientific community Answer: C Explanation: C) Though the business environment may affect the HRM process, a far more important factor for influencing the activities of HRM is the legal environment.

The laws, for the most part, largely determine how HR managers do their job, making "the legal environment" the correct response. Both "the natural environment" and "the scientific community" can be ruled out because neither has a direct effect on hiring, firing, or any other HR activity.

Diff: 2 Objective: 7.1 Learning Outcome: Identify and discuss the components of the human resource management process 50) The ________ prohibits discrimination based on race, color, religion, national origin, or sex.

A) Privacy Act B) Title VII of the Civil Rights Act C) Equal Pay Act D) Sarbanes-Oxley Act Answer: B Explanation: B) Title VII of the 1964 Civil Rights Act is probably the most important anti-discrimination law ever passed, prohibiting unfair treatment based on race, color, religion, national origin, or sex. This makes the "Title VII of the Civil Rights Act" the correct response. The Equal Pay Act prohibits pay discrimination based on sex. The Privacy Act gives employees a right to see their reference letters. The Sarbanes-Oxley Act establishes financial recordkeeping standards.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 51) It is against the law to discriminate on the basis of sexual orientation ________.

A) in all 50 states B) only in California C) nowhere in the United States D) in many states Answer: D Explanation: D) Discrimination on the basis of sexual orientation is not a federal law, but it is illegal in many states, making that the correct response and eliminating the other choices.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

52) A wheelchair-bound applicant may be denied a job ________.

A) under no circumstances B) if the job is strenuous or physically tiring in some way C) if the job requires complete physical mobility D) in some states Answer: C Explanation: C) A person in a wheelchair may be denied a job only if the job requires running, walking, or some other action that the person cannot perform. This makes the choice indicating "complete physical mobility" the correct response and eliminates "under no circumstances." The choice regarding a strenuous job is incorrect because a person in a wheelchair could cope with a strenuous or tiring job just as well as a person without a disability. The remaining choice is incorrect because discrimination based on a disability is prohibited by federal, not state, law.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 53) Affirmative action programs seek to make sure that employers ________ minority groups.

A) pay equal wages to B) enhance employment opportunities for C) provide unemployment benefits for D) establish training programs for Answer: B Explanation: B) Affirmative action programs seek to make sure that minorities and other protected groups get a fair chance at opportunity, making "enhance employment opportunities for" the correct response. Affirmative action is not an equal wage program, a benefits program, or a training program, making all of these choices incorrect.

Diff: 3 AACSB: Multicultural and diversity understanding Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

54) Which U.S. law gives you the legal right to see your professor's letter of recommendation?

A) Civil Rights Act of 1991 B) Privacy Act of 1974 C) Polygraph Protection Act of 1988 D) Sarbanes-Oxley Act of 2002 Answer: B Explanation: B) The Privacy Act of 1974 gives employees the right to check up on reference letters. None of the other choices is concerned with reference letters, so they are incorrect responses for this question.

Diff: 2 Objective: 7.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 55) Which of the following countries' laws pertaining to HRM practices most closely parallel those in the United States?

A) Canada B) Mexico C) Australia D) Germany Answer: A Explanation: A) Of the countries listed, Canada's HRM practices are most similar to those in the United States. Canada's HRM laws are less federalized than those in the United States, meaning that individual Canadian provinces may have their own interpretation of basic anti-discrimination laws. Taken together, these factors make "Canada" the correct response.

Diff: 2 AACSB: Dynamics of the global economy Objective: 7.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 56) ________ in Germany give(s) employees the right to participate in personnel decisions.

A) Collective bargaining B) Unionization C) Board representatives D) Work councils Answer: D Explanation: D) In most of Western Europe, work councils by law must be consulted when decisions involving personnel changes are made, including hiring and firing.

This makes "work councils" the correct answer and eliminates the other three responses. Note that work councils are part of a larger practice called representative participation, which empowers workers and gives them a say in how companies are run.

Diff: 2 AACSB: Dynamics of the global economy Objective: 7.1 Learning Outcome: Identify the fundamental concepts and issues of international

business and management Fundamentals of Management, 9e (Robbins) Chapter 8 Managing Change and Innovation 1) Organizational change can be any alteration in an organization's people, structure, or technology.

Answer: TRUE Explanation: Organizational change is defined as change in structure, technology, or the people in an organization.

Diff: 1 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 2) Change is something that managers strive to eliminate completely.

Answer: FALSE Explanation: Managers recognize that change is inevitable and cannot be eliminated.

Rather than try to get rid of change, managers seek to manage change.

Diff: 1 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 3) An example of a change in structure is an organization becoming more decentralized.

Answer: TRUE Explanation: Examples of structural changes include changes in authority, how the organization is coordinated, how jobs are designed, and span of control.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 4) A company changing its computer operating system would not be an example of a technology change because no new technological equipment was used.

Answer: FALSE Explanation: A technology change includes changes in equipment or in the way equipment is used. Therefore, a new operating system would qualify as a technology change, making the statement false.

Diff: 2 AACSB: Use of information technology Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

5) Continuous improvement changes are not considered changes in technology because they are changes that are planned and expected.

Answer: FALSE Explanation: Whether or not changes are planned and expected does not disqualify them as technological changes. Therefore, the statement must be false.

Diff: 2 AACSB: Use of information technology Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 6) An example of changes in people would involve a manager widening her span of control.

Answer: FALSE Explanation: An organizational change in people involves an organization's people changing their attitudes and behaviors. Changing a span of control is a structural change in the way a manager relates to subordinates, not a people change. Therefore, the statement is false.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 7) An aggressive new competitor in the marketplace is an external force that creates a need for organizational change that companies frequently face today.

Answer: TRUE Explanation: Competition is an example of external force that creates a need for organizational change.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 8) New online advertising technology is an external force that creates a need for organizational change when it causes a company to change its advertising strategy.

Answer: TRUE Explanation: Though the change in ad strategy was an internal change, the force for that change was external, the new computer technology.

Diff: 2 AACSB: Use of information technology Objective: 8.1 Learning Outcome: Describe the components of the management environment

9) Labor markets are an internal force that creates a need for organizational change.

Answer: FALSE Explanation: When labor markets change, organizations must change with them, so labor markets are an external, not an internal, force for change. For example, an influx of highly skilled immigrant labor can cause a company to revise its ambitions.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the components of the management environment 10) The decision of an organization to bring in new equipment from the outside is an example of an external force that creates a need for organizational change.

Answer: FALSE Explanation: The decision to purchase the equipment comes from inside the company. Therefore, the decision is an internal, not an external, force that creates a need for organizational change, so the statement is false.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the components of the management environment 11) In an organization, only a manager can be a change agent.

Answer: FALSE Explanation: A change agent is someone who effects change. While managers typically are the change agents in an organization, any employee can cause organizational change to occur. For example, an office-cleaning crew can cause organizational change by changing the way employees need to lock their office doors.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 12) Consultants are less likely to be change agents than internal managers.

Answer: FALSE Explanation: Consultants are more likely to be change agents because they are less burdened by the consequences and repercussions of their actions than internal managers. Internal managers are more cautious and reluctant to call for change because they have to live with the changes they suggest.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

13) The "calm waters" metaphor imagines the organization as a large ship crossing a calm sea.

Answer: TRUE Explanation: The "calm waters" metaphor envisions the organization to be very large and fairly imperturbable, like a large ship. The "waves" of the "sea" may affect the ship, but they don't threaten its stability.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 14) Kurt Lewin sees the first step in change as the freezing of the status quo.

Answer: FALSE Explanation: Lewin sees the first step of change as an unfreezing, not a freezing, of the status quo.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 15) In Lewin's view, the only way to effect change is to increase the driving forces that direct change away from the status quo.

Answer: FALSE Explanation: Decreasing the restraining forces that prevent movement away from the equilibrium can also cause change, according to Lewin. A third way to effect change is to combine a driving force increase and a restraining force decrease.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 16) The main idea of the "white-water rapids" metaphor is that change is always destructive.

Answer: FALSE Explanation: The main idea of the "white-water rapids" metaphor is that change is constant, unpredictable, often drastic, but not necessarily destructive, so the statement is false.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

17) In the "white-water rapids" metaphor of change, managers should expect change at any time, and it may last for unspecified lengths of time.

Answer: TRUE Explanation: The "white-water rapids" metaphor sees change as constant, yet at the same time, very erratic and unpredictable.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 18) The number of managers who face "white-water rapids" metaphor conditions is getting smaller.

Answer: FALSE Explanation: In today's world, "white-water" situations are on the increase rather than the decrease, so more, not fewer, managers are facing conditions of never-ending disruption.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 19) Organization development (OD) consists of efforts to help organization members deal with unplanned changes.

Answer: FALSE Explanation: The statement is false because OD focuses on dealing with planned, not unplanned, changes.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 20) One important reason why organization development efforts are needed is that even planned change can be very upsetting to members of an organization.

Answer: TRUE Explanation: Change is stressful; OD aims to minimize the amount of stress that change causes.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 21) One reason people resist change is that it goes against our habits.

Answer: TRUE Explanation: To cope with this complexity, we rely on habits or programmed responses. But when confronted with change, our tendency to respond in our accustomed ways becomes a source of resistance.

Diff: 3 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in

an organization 22) Change threatens the investment you've already made in the status quo.

Answer: TRUE Explanation: People who have made a large investment in the status quo, the way things are, are threatened by change that can disrupt that status quo.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 23) Negotiation twists and distorts facts to reduce resistance to change.

Answer: FALSE Explanation: Manipulation and co-option are the change resistance techniques that twist and distort facts. Negotiation relies on trading items of value to placate people who resist change.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 24) Education is a good way to overcome resistance to change due to misinformation.

Answer: TRUE Explanation: When misinformation or poor communication causes employees to resist change, the situation can often be cleared up by merely educating the employees with regard to the facts.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 25) A manager who twists facts to make change seem less disruptive is using the technique of coercion.

Answer: FALSE Explanation: Twisting or distorting facts would be categorized as manipulation, not coercion, so the statement is false.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 26) A manager who mentions that supervisors might lose their jobs if they don't go along with a change is using the technique of coercion.

Answer: TRUE Explanation: Coercion involves making direct or indirect threats, so suggesting that people could lose their jobs qualifies as coercion.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 8.2 Learning Outcome: Discuss the role of ethics and social responsibility in

management 27) Allowing employees to participate in the change process is NOT a common way to deal with resistance to organizational change.

Answer: FALSE Explanation: Participation involves bringing those individuals directly affected by the proposed change into the decision-making process. Their participation allows these individuals to express their feelings, increase the quality of the process, and increase employee commitment to the final decision.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 8.2 Learning Outcome: Discuss the role of ethics and social responsibility in management 28) Stress can arise from an opportunity.

Answer: TRUE Explanation: Demands, constraints, and opportunities all can cause people to feel stress. Opportunities are stressful because people get anxious when they know a lot is "on the line."

Diff: 2 Objective: 8.3 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 43) Change can't be eliminated, so managers must learn to ________ successfully.

A) avoid it B) ignore it C) work around it D) manage it Answer: D Explanation: D) Since change can't be eliminated, managers must learn to manage it successfully, making that the correct response. Avoiding change is impossible, making that choice an incorrect response. Ignoring change or trying to work around it would not prevent managers from being affected by change, so those options are incorrect.

Diff: 1 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 44) Which of the following is an example of a structural organizational change?

A) changing employee attitudes B) changing work practices C) purchasing new work equipment D) changing managerial span of control Answer: D Explanation: D) Changing work practices and obtaining new equipment are examples of changing technology, so those two choices are not correct. Changing attitudes is an example of a "people change," so "changing employee attitudes" is not correct.

Structural changes involve changing relationships between people within the

organization. Since span of control changes interpersonal relationships, it qualifies as a structural change, so "changing managerial span of control" is the correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

45) Which of the following is an example of a technology change within an organization?

A) forming teams to complete tasks B) workers using new software C) workers wanting to telecommute D) workers wanting flexible hours Answer: B Explanation: B) A technology change requires the organization to change the way work is done. Using new software is a change in the method of getting work done, so that choice qualifies as a technology change and is the correct answer. Forming teams changes organizational structure, so it is a structural change, not a technology change.

Workers wanting to telecommute or have more flexible hours are attitude changes, so they qualify as "people changes," not technology changes.

Diff: 2 AACSB: Use of information technology Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 46) Which of the following is an organizational "people change"?

A) work methods that people use B) authority relationships between people C) attitudes that people have D) job redesign Answer: C Explanation: C) Though work methods, authority relationships, and job redesign all involve people, an organizational change is a "people change" only when it involves changes in attitudes, behavior, expectations, or perceptions of people. This makes those three choices incorrect responses and "attitudes that people have" the correct response, because it is the only response that refers to attitudes.

Diff: 3 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

47) Which of the following is an organizational structure change?

A) the building of a new workshop B) resentment of bosses by employees C) a new way to package chocolate cake D) changing who reports to whom Answer: D Explanation: D) A structure change must alter the relationships between people in an organization. Changing who reports to whom alters an authority relationship, so it is a structure change, making it the correct response. Both a new workshop and a new way to make cake are work method or technology changes, not structure changes, so they are incorrect choices. Resentment is an employee attitude change, so it qualifies as a people change, not a structure change.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 48) Which of the following is an organizational technology change?

A) purchase of a new backhoe B) employees expecting a raise C) employees accepting a new schedule D) widening of span of control Answer: A Explanation: A) A technology change requires a change in how work is done or what it is done with. New equipment qualifies as a technology change, so "purchase of a new backhoe" is the correct response. Both employees expecting a raise and employees accepting a new schedule involve attitudes, so they are examples of people changes, not technology changes, making both choices incorrect. Finally, a span of control change is a structural, not a technology change, so "widening of span of control" is incorrect.

Diff: 3 AACSB: Use of information technology Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

49) The Patient Protection and Affordable Care Act is an example of which of the following forms of environmental change?

A) internal B) technology C) government laws and regulations D) labor markets Answer: C Explanation: C) Since it was issued from the outside by government, the Patient Protection and Affordable Care Act is clearly an external, not an internal, force of change, making "internal" incorrect. The act was not initiated by technology or labor markets, so those choices can be eliminated. The act was initiated by the government, making "government laws and regulations" the correct response.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 8.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 50) Falling interest rates are an example of what kind of external force that causes a company to need to make an organizational change?

A) marketplace competition forces B) government laws and regulations C) labor market forces D) economic forces Answer: D Explanation: D) Falling interest rates do not originate in the marketplace, the government, or the labor force, so these choices are incorrect. Interest rate drops are caused by changing economic conditions, so "economic forces" is the correct answer here.

Diff: 1 Objective: 8.1 Learning Outcome: Describe the components of the management environment 51) Which of the following is an internal force that can cause a company to make an organizational change?

A) a new ad campaign B) new safety requirements C) a new rival company D) new pollution laws Answer: A Explanation: A) New safety requirements, new laws, and a new competitor are forces that come from the outside, not from the inside, that cause a company to need to change, so they are incorrect responses. Only a new ad campaign is initiated from the inside, so that is the correct response.

Diff: 3 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 52) Which of the following is an external force that would cause a company to make

an organizational change?

A) an organization-wide restructuring B) the naming of a new CEO C) a widening span of control for managers D) a booming economy Answer: D Explanation: D) Restructuring, naming a new CEO, and changing employee relationships are examples of internal, not external, forces that create a need for change, so they are incorrect responses. Only a booming economy represents a force of change that comes from outside of the company, so that is the correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the components of the management environment 53) To compete with rival company X, company Y changes its management structure.

This is an example of ________.

A) an internal change causing an external change B) an internal change causing another internal change C) an external change causing another external change D) an external change causing an internal change Answer: D Explanation: D) Competition from a rival is an external marketplace change.

Company restructuring is an internal change. The external competition caused the internal structure change, making that the correct response. All other responses are incorrect because they do not identify this external-internal relationship.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the components of the management environment

54) After a thorough company-wide self-examination, company Y decides to set up work teams. This is an example of ________.

A) an internal change causing an external change B) an internal change causing another internal change C) an external change causing another external change D) an external change causing an internal change Answer: B Explanation: B) The self-examination was an internal change, followed by the decision to set up work teams, another internal change. This makes the choice indicating an internal change causing another internal change the correct response and eliminates all other responses because they do not identify this internal-internal relationship.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 55) A company's workers asking to be able to celebrate Mexican holidays is an example of ________ force for change.

A) an external workforce composition B) an internal workforce composition C) an external tactic D) an internal strategy Answer: B Explanation: B) The request is an internal force for change since it is being made by workers who already work at the company. Being internal rules out the two external choices. The request is the result of the composition of the company workforce, not any strategy, which eliminates "an internal strategy" and makes "an internal workforce composition" the correct response.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

56) Labor strikes are an example of what change factor that may encourage a change in management thinking and practices?

A) workforce composition B) equipment C) employee attitude D) strategy Answer: C Explanation: C) A labor strike would not be due to any new internal company strategy change, equipment change, or workforce composition change. Only a change in employee attitudes could cause a strike, making that the correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 57) In organizations, people who act as catalysts and assume the responsibility for managing the change process are called ________.

A) managers B) change agents C) change managers D) nonmanagerial employees Answer: B Explanation: B) Change agents are people within an organization who cause change to occur, making that the correct response. Managers usually take on the role as change agents, but a change agent can be virtually anyone within an organization, eliminating "managers" and "nonmanagerial employees" as correct responses. Change manager is not a recognized organizational change term, so it is an incorrect response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

58) Outside consultants generally try to initiate ________ changes than internal managers.

A) more drastic B) less drastic C) more cautious D) fewer Answer: A Explanation: A) Since outside consultants do not have to live with the changes they suggest, they tend to be less cautious than internal managers and more likely to initiate drastic or extreme changes, making "more drastic" the correct response. Since "more drastic" is the correct response, both "less drastic" and "more cautious," which roughly mean the same thing, can be eliminated. If anything, consultants might order up more, rather than fewer, changes, so "fewer" also is an incorrect response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 59) The "calm waters" metaphor envisions an organization as ________.

A) a large ship on a roiling sea B) a large ship on a calm sea C) a small raft on a calm sea D) a small raft on a roiling sea Answer: B Explanation: B) The "calm waters" metaphor sees the organization as a large ship that is fairly imperturbable sailing on calm seas, barely noticing the changes that occur.

This makes "a large ship on a calm sea" the correct response and eliminates the two choices regarding a small raft because they match the organization with a raft, not a ship. It rules out "a large ship on a roiling sea" because it characterizes the water as roiling instead of calm.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

60) The "white-water rapids" metaphor envisions an organization as ________.

A) a large ship on a roiling sea B) a large ship on a calm sea C) a small raft on a calm river D) a small raft on a raging river Answer: D Explanation: D) The "white-water rapids" metaphor sees the organization as a small raft being tossed on an unending series of white-water rapids, being buffeted and nearly capsizing at each step of the journey. This makes "a small raft on a raging river" the correct response and eliminates the two choices regarding ships because they match the organization with a ship, not a raft. It rules out "a small raft on a calm river" because it characterizes the water as calm instead of raging.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 61) The "white-water rapids" metaphor sees change as ________.

A) an occasional occurrence B) the natural state of things C) an unpleasant interruption of the normal calm D) something that must be eliminated Answer: B Explanation: B) The "white-water rapids" metaphor sees change as the natural state of things, not an interruption or something that happens only from time to time. Since change should be expected, instead of trying to eliminate change, managers should be devoting their efforts to managing change. This makes "the natural state of things" the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

62) Kurt Lewin's "calm waters" metaphor sees change as ________.

A) an unusual event B) the natural state of things C) unfortunate D) avoidable Answer: A Explanation: A) The "calm waters" metaphor sees calm equilibrium as the natural state of things, with change being an occasional occurrence that briefly upsets the status quo before things are restored to normal. This makes "an unusual event" the correct response and eliminates "the natural state of things" since change in Lewin's view is clearly not the natural state of things. Both "unfortunate" and "avoidable" can also be eliminated since Lewin does not see change as a negative thing or a thing that can necessarily be avoided. In fact, rather than avoid change, Lewin devised a system for dealing with change.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 63) The first step in Lewin's three-step description of the change process involves ________.

A) freezing the new state B) changing to a new state C) unfreezing the status quo D) changing to a new status quo Answer: C Explanation: C) Kurt Lewin sees the three-step process of change as follows: first the status quo must be unfrozen so change can occur. Next, the change occurs and a new state is reached, and finally that new state must be frozen into place, creating a new status quo. Clearly, since the remaining choice identifies the unfreezing of the status quo, it is the correct response and the other responses are incorrect.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

64) The final step in Lewin's three-step description of the change process is ________.

A) freezing the new state B) unfreezing the status quo C) changing to a new state D) unfreezing the new state Answer: A Explanation: A) Kurt Lewin sees the three-step process of change as follows: first the status quo must be unfrozen so change can occur. Next, with the status quo unfrozen, the change occurs and a new state is reached. Finally, that new state must be frozen into place, making "freezing the new state" the correct response. Note that "unfreezing the new state" is incorrect because that is not part of Lewin's process—it would initiate an entirely new change process.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 65) According to Lewin, which of the following is a force that might overcome inertia and unfreeze the status quo?

A) increase restraining forces B) maintain restraining forces C) decrease driving forces D) increase driving forces Answer: D Explanation: D) In Lewin's view, driving forces promote deviation from the status quo while restraining forces hinder this deviation. Therefore, there are two ways to move away from the status quo: the driving forces must increase or the restraining forces must decrease (or both must occur). "Increase driving forces" is the only choice that lists one of these two alternatives, so it is the correct response and the other responses are incorrect.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

66) According to Lewin, which of the following is the objective of refreezing?

A) to stabilize the new situation B) to promote movement away from existing equilibrium C) to eliminate the need for future change D) to direct behavior away from the status quo Answer: A Explanation: A) Lewin's view focuses on stability and equilibrium. Change destabilizes the situation, so the only way to restore order and equilibrium after change occurs is the refreeze. This makes "stabilize the new situation" the correct response and eliminates the other three choices since the goal of refreezing is clearly not to promote new change or rule out any future change.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 67) According to Lewin, which of the following is the best way to unfreeze the status quo?

A) increase restraining forces B) decrease restraining forces and increase driving forces C) decrease driving forces D) increase restraining forces and increase driving forces Answer: B Explanation: B) In Lewin's view, both decreasing driving forces and increasing restraining forces work to resist change so neither choice would help unfreeze the status quo. Both "decrease restraining forces" and "increase driving forces" work to unfreeze the status quo, so if both things are done together the status quo would be most effectively unfrozen, making that the correct response and eliminating all other responses.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

68) The goal in Lewin's "calm waters" metaphor is ________.

A) to change the current equilibrium state B) to reach a state of constant change C) to eliminate the equilibrium state D) to establish a new equilibrium state Answer: D Explanation: D) Lewin's "calm waters" metaphor seeks to change the current equilibrium state and ultimately establish a new equilibrium, making "establish a new equilibrium state" the correct response. This eliminates "change the current equilibrium state," since changing the current equilibrium comes first in the process.

Lewin's goal of seeking an equilibrium state clearly is the opposite of reaching a state of constant change or getting rid of the equilibrium, so both of these choices are incorrect.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 69) Today, Lewin's "calm waters" metaphor is increasingly thought to be ________.

A) illogical B) an apt description of the current situation C) a blueprint for the future D) obsolete Answer: D Explanation: D) Though Lewin's model is not at all illogical and is seen to be based on sound reasoning, it is not viewed as a good description of today's economy or a good model for the future. This is because change has become so violent and ubiquitous in today's economic climate that new models, especially the "white-water rapids" metaphor, have largely supplanted it and made it obsolete, making "obsolete" the correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

70) Which phenomenon in today's business climate has made the "white-water rapids" metaphor popular?

A) reduced competition B) corporations that are too powerful C) organizations that resist change D) constant and chaotic change Answer: D Explanation: D) Lewin's "calm waters" metaphor is largely being replaced by the "white-water rapids" metaphor because observers recognize that today's economic climate is one of constant change. Lewin saw long periods of equilibrium dominating the scene that were interrupted by periods of chaos and change. Current thinkers feel that the periods of equilibrium are not only not as long as they used to be, they are largely disappearing completely, replaced by constant disequilibrium, or change.

These factors combine to make "constant and chaotic change" the correct response.

The other choices provided are either untrue or clearly not factors in making the "white-water rapids" metaphor prevalent.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 71) Writing laws to reward industries to reduce carbon emissions in an effort to combat global climate change can be best described as an example of which of the following?

A) unfreezing the status quo B) freezing a change into place C) implementing change D) refreezing the status quo Answer: A Explanation: A) The change that is desired here is to reduce carbon emissions.

Writing new laws is an example of unfreezing the status quo to prepare the situation so the change—reducing carbon emissions—can be implemented. That makes "unfreezing the status quo" the correct answer and eliminates the other choices.

Diff: 3 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

72) Kurt Lewin originated some of his most important group dynamics ideas by studying which of the following?

A) family vacations during World War I B) force fields in physics C) how football has blocking and driving forces D) family food habits during World War II Answer: D Explanation: D) Lewin did not use physical science, football, or family vacations to develop his group dynamics theories. He did, however, study families, but in terms of decisions that had to do with food rather than vacations. This makes "family food habits" the correct response and eliminates the other responses as correct answers.

Diff: 2 Objective: 8.1 Learning Outcome: Summarize the major historical and current approaches to management 73) Lewin's force field analysis identified ________ forces that compete when people try to achieve a goal.

A) physical push-and-pull B) driving and blocking C) enormous D) magnetic Answer: B Explanation: B) Force field analysis involved reaching goals, not physical forces, so "physical push-and-pull" and "magnetic" can be eliminated as correct choices. Lewin saw driving forces as moving positively toward a goal and blocking forces as resisting the goal, making "driving and blocking" the correct response. Since these driving and blocking forces could have any size, "enormous" can be ruled out as a correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 74) In terms of change, Lewin's force field analysis might see ________ as a driving force.

A) fear of change B) inertia C) reward from change D) difficulty of change Answer: C Explanation: C) Fear of change, inertia, and the difficulty of change can be seen as obstacles that block change, so they are blocking forces, not driving forces. A reward from change is an incentive, so it can be thought of as a driving force, making" reward from change" the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization

75) Lewin's force field analysis might view a company ________ as a blocking force for change.

A) becoming more mechanistic B) rewarding innovation and creativity C) becoming more organic D) decreasing centralization Answer: A Explanation: A) Rewarding innovation, becoming more organic, and decreasing centralization would all be seen as steps that would make a company more, not less, open to change, so these choices would be viewed as driving, not blocking, forces and, therefore, all three would be incorrect. Becoming more mechanistic would make a company more conservative and less open to change, so that would represent a blocking force and be the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 76) Today's economic climate can be compared to a college class that ________.

A) focuses on only one topic all semester B) focuses on several topics during the semester C) may last 20 minutes or 3 hours D) lasts exactly 1 hour Answer: C Explanation: C) The key to understanding today's economic climate is that things are uncertain. All the incorrect choices can be eliminated because they refer to certain rather than uncertain events. Only the choice regarding "last 20 minutes or 3 hours" presents uncertainty, so it is the correct answer.

Diff: 1 Objective: 8.1 Learning Outcome: Describe the change process and strategies for making changes in an organization 77) Organization development (OD) helps employees ________.

A) deal with planned change B) deal with unplanned change C) avoid unpleasant change D) avoid all types of change Answer: A Explanation: A) The goal of OD is to help employees deal with planned, not unplanned, change, making "planned change" the correct response and "unplanned change" incorrect. OD sees change as inevitable in most cases, so it would not seek to avoid change, making "avoid unpleasant change" or "avoid all types of change" incorrect responses.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans

78) Organization development can be viewed as an attempt to change an organization's ________.

A) structure B) financial goals C) culture D) status Answer: C Explanation: C) The focus of OD is to change attitudes and values of employees.

Attitudes and values have more to do with an organization's culture than its monetary goals, standing in the world, or how it is organized. This makes "culture" the correct response and eliminates the other three choices.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 79) The most popular OD efforts involve cooperation and these kinds of activities.

A) individual interactions B) group interactions C) group assessment D) individual assessment Answer: B Explanation: B) Any activity that helps organizations deal with planned change is considered a valid OD activity. However, most OD activities feature cooperation between organization members and group interactions, making "group interactions" the correct response. "Individual interactions" and "assessment" are incorrect because they focus on the individual. "Group assessment" is incorrect because it features an assessment, not an interaction.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 80) Which of the following is NOT a common method of organization development (OD)?

A) teambuilding B) process consultation C) positive feedback D) survey feedback Answer: C Explanation: C) Teambuilding, process consultation, and survey feedback are methods of OD that are frequently used by organizations to deal with planned change, so they are incorrect responses. Positive feedback is not a recognized OD method, so it is the correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans

81) In process consultation, ________ observe and analyze an organization to find ways to improve interpersonal processes.

A) outside consultants B) top-level managers C) ordinary employees D) company efficiency specialists Answer: A Explanation: A) The key to process consultation is that the organization is observed and evaluated by outsiders who can get an objective view of interpersonal process issues. These consultants are not intended to solve problems, but rather to identify problem areas and help managers diagnose and remedy those problems. This makes "outside consultants" the correct response and rules out "managers," "employees," and "specialists" since all three are part of the organization and process consultation consultants are always outsiders.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 82) The primary goal of the OD method called teambuilding is to ________.

A) increase efficiency B) increase trust and openness C) identify troublemakers D) play games such as volleyball to build morale Answer: B Explanation: B) Teambuilding is not concerned with efficiency or identifying troublemakers within an organization, nor does it involve game-playing. In fact, teambuilding does the opposite of singling out individuals as troublemakers, which would tend to decrease trust and openness among employees. Teambuilding seeks to find ways to increase, rather than decrease, mutual trust and openness, making "increase trust and openness" the correct response.

Diff: 2 Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 83) Intergroup development is an OD method that focuses on ________.

A) increasing competition within a single work group B) increasing competition between work groups C) increasing trust within a single work group D) increasing trust between work groups Answer: D Explanation: D) Intergroup development focuses on increasing trust and understanding between different work groups. This rules out "increasing competition" and "trust within a single work group" because they both focus on a single work group, not the relationship between groups. Intergroup development seeks to decrease, rather than increase, competition, making "increasing competition between work groups" an incorrect response. This identifies "increasing trust between work groups" as the correct response.

Diff: 2

Objective: 8.1 Learning Outcome: Discuss the processes and tools of developing different types of plans 84) Which of the following is a term borrowed from the physical sciences that accurately describes people's resistance to change?

A) energy B) uncertainty C) inertia D) momentum Answer: C Explanation: C) By definition, inertia is the tendency of an entity to resist change. In physics, inertia refers to physical objects. In management psychology, inertia refers to the tendency among people to resist change, making "inertia" the correct response.

The other terms—energy, uncertainty, and momentum—do not specifically refer to resisting change, so they are all incorrect responses. In fact, momentum, the tendency of an entity to continue moving, is roughly the opposite of inertia.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 85) Uncertainty causes people to resist change because it ________.

A) replaces the unknown with the known B) replaces the known with the unknown C) increases performance expectations of an employee D) decreases performance expectations of people Answer: B Explanation: B) The key to uncertainty is that it neither increases nor decreases performance expectations of employees, but rather it makes them unsure of precisely what is expected of them. People find this state of "not knowing" very unsettling, so they tend to resist change. Put another way, people resist change because it replaces the known with the unknown, making that the correct response and "replaces the unknown with the known" incorrect. With respect to expectations, uncertainty replaces known expectations with unknown expectations.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

86) Which of the following is NOT a common reason that people resist change?

A) habit B) uncertainty C) concern over personal loss D) overconfidence Answer: D Explanation: D) Fear of uncertainty can cause people to resist change. People will also resist change simply out of habit or because they think the new changed conditions somehow threaten what they already have and have worked for.

Overconfidence, on the other hand, is not a reason that would cause people to resist change, making that the correct response. If anything, people who are underconfident, not overconfident, in their ability to deal with future unknowns would tend to resist change.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 87) Older workers tend to resist change more than younger workers because they ________.

A) have less invested in the current system B) have more invested in the current system C) have confidence in themselves D) have less to lose Answer: B Explanation: B) Older workers who have attained a level of status and achievement in an organization typically feel that they have the most to lose from change. They have more, not less, invested in the system, making "have more invested in the system" the correct response and eliminating "have less invested" and "have less to lose" as correct responses. Older workers may in fact lack confidence in their ability to deal with change, making "have confidence in themselves" an incorrect response.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

88) Workers seem to reject a simple new manufacturing method that has been shown to increase company sales because they say, "That is not the way we do things around here." These workers are most likely to be resisting change due to which of the following?

A) uncertainty B) habit C) conflicts with company goals D) fear of the unknown Answer: B Explanation: B) The statement "That is not the way we do things around here" indicates that procedures in this company are entrenched in habit, making that the correct response. These workers are not uncertain or fearful of the unknown since the new change has been fully identified and is described as simple. The method does not appear to conflict with company goals since it is said to increase sales, so "conflicts with company goals" is an incorrect response.

Diff: 2 AACSB: Analytic thinking Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 89) Which kind of resistance to change is most likely to be beneficial to a company?

A) conflict with company goals B) uncertainty C) habit D) fear of losing status or possessions Answer: A Explanation: A) Employees who resist change because they truly think that the change is harming the company in some way may be helping the company by pointing out the error that it is making. This makes "conflict with company goals" the correct response. Resisting change out of habit, fear of uncertainty, or fear of losing something of value is very unlikely to be beneficial to a company since in each case the employee is putting his or her own concerns ahead of company concerns.

Diff: 3 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

90) Employees at a company protest a change that allows an automatic answering system to answer phone inquiries, claiming that the company is becoming "depersonalized." They are most likely resisting change due to ________.

A) uncertainty B) habit C) conflicts with company goals D) fear of losing status Answer: C Explanation: C) The new phone system does not increase the employees' uncertainty about their jobs or threaten their standing in the company, so these choices are incorrect. They are not protesting the change out of habit since they are explicitly identifying "depersonalization" as the source of their complaint. This leaves "conflicts with company goals" as the correct response—the employees think that the new phone system will damage the image of the company, so it is conflicting with company goals.

Diff: 3 AACSB: Analytic thinking Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 91) Workers in a company are complaining about a new employee evaluation system.

Which kind of resistance to change are they demonstrating?

A) resistance out of habit B) resistance because of uncertainty C) resistance to protect company goals D) resistance to protect market share Answer: B Explanation: B) The new system is creating a sense of uncertainty in employees, making "resistance because of uncertainty" the correct response. The employees don't know how the new system will work or whether it will threaten their pay or status in the company. The employees are not resisting change out of habit since their own actions do not require change with this new system. Similarly, there is no reason or evidence to assume that the employees are trying to protect company goals or market share, so both of these choices are incorrect.

Diff: 2 AACSB: Analytic thinking Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

92) Managers typically implement programs to reduce resistance to change when employees ________ in some way.

A) become uncomfortable B) are challenged C) become self-satisfied D) become dysfunctional Answer: D Explanation: D) While it might not be ideal for employees to feel uncomfortable or self-satisfied, neither of these conditions would be sufficiently deleterious to organizational interests to cause managers to implement programs to reduce resistance to change. This makes these two choices incorrect. Managers may actually want employees to feel challenged, so that choice can be ruled out as a correct response.

The line that managers typically draw for implementing resistance to change reduction programs is whether or not employees are dysfunctional. This makes "become dysfunctional" the correct response.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 93) A technique that helps employees deal with change that appeals to their sense of logic is ________.

A) manipulation B) education and communication C) coercion or threats to employees D) co-optation Answer: B Explanation: B) When misunderstanding of change causes employee problems, simply laying out the facts can often clear up misunderstandings and greatly diminish resistance to change, making "education and communication" the correct response.

Rather than appeal to logic, manipulation, co-optation, and coercion can sometimes distort logic to reduce resistance to change, so those choices are incorrect.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

94) A technique that helps employees deal with change that includes them in the decision-making process is ________.

A) education and communication B) negotiation C) participation D) coercion Answer: C Explanation: C) Education and communication focus on using logic and facts to reduce resistance to change. Negotiation uses bargaining to reduce resistance to change. Coercion uses arm-twisting and threats to reduce resistance to change.

Participation is the only choice that deals with decision making, so that is the correct response for this question.

Diff: 2 Objective: 8.2 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 95) If several efforts between a manager and an employee for reducing resistance to change fail to allay employee fears, a manager might take him- or herself out of the process and try this.

A) facilitation and support B) negotiation between parties C) manipulation D) participation Answer: A Explanation: A) Since the manager wants to remove him- or herself from the process, "participation," "manipulation," and "negotiation" are incorrect choices as they involve contact between the manager and the employee. The only choice that can take the manager out of the process completely is "facilitation and support," which can allow a counselor to deal with the fearful employee, so that is the correct response.

Diff: 2 AACSB: Communication abilities Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

96) When an entire workforce threatens to go on strike to protest a work change, managers might try this method of reducing resistance to change.

A) education and communication B) participation C) facilitation and support D) negotiation Answer: D Explanation: D) An entire workforce constitutes a powerful source of opposition to the change, so education and communication, participation, or facilitation and support would likely not be enough to prevail over such a strong adversary. When powerful opposition exists, managers often must negotiate on equal terms with the other side to try to hammer out an agreement that both parties can live with. This makes "negotiation" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 97) When managers threaten to fire workers unless they agree to go along with new company policies, they are using which of the following?

A) negotiation B) coercion C) manipulation D) education and communication Answer: B Explanation: B) Negotiation can be heated, but it should not involve open threats.

Manipulation can trick or deceive, but it never threatens an adversary. Similarly, education should never involve threats. Only coercion necessarily involves threats, so that is the correct response for this question.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization

98) Which method of reducing resistance to change is most likely to backfire on the manager who uses it?

A) education and communication B) negotiation C) participation D) manipulation Answer: D Explanation: D) Negotiation, participation, and education and communication do not involve an element of dishonesty or deception, so they are not likely to backfire on the user, making these choices incorrect. Manipulation often does involve distortion or deception, so it can backfire on its user, making it the correct response.

Diff: 2 Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 99) When a manager attempts to buy off a key leader who opposes change by offering her a promotion, he is using which of the following methods of reducing resistance to change?

A) manipulation B) co-optation C) coercion D) negotiation Answer: B Explanation: B) Though often ethically dubious, manipulation and coercion do not involve buying off an adversary either directly or indirectly. Neither does negotiation, making those three choices incorrect responses. When a party attempts to buy off an adversary, that is an example of co-optation, making that the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 8.2 Learning Outcome: Describe the change process and strategies for making changes in an organization 5) Individuals try to reconcile attitudes and behavior so they are both rational and consistent.

Answer: TRUE Explanation: Research and common experience both indicate that individuals like to be consistent with respect to attitudes and behavior. Another way of seeing this issue is that people do not like to be seen as hypocrites—they try to do what they say they believe in.

Diff: 2 AACSB: Reflective thinking Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 6) Cognitive dissonance arises when people feel that their behavior and attitudes are consistent.

Answer: FALSE

Explanation: Dissonance occurs when individuals feel that they are being inconsistent, not consistent.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 7) The discomfort that results from high dissonance can be reduced when an individual feels that he or she has a choice in the matter.

Answer: FALSE Explanation: In fact, not having a choice usually makes a person feel better about dissonance than having a choice. Not having a choice takes the responsibility off of the individual and so relieves the discomfort of dissonance.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 8) Research shows that there is a fairly strong correlation between high satisfaction and high productivity.

Answer: TRUE Explanation: In general, the more satisfied a person is with his or her job, the more productive he or she is likely to be.

Diff: 2 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

51) The three elements that make up an attitude are its ________ components.

A) cognitive, affective, and behavioral B) affective, effective, and defective C) cognitive, component, and affective D) behavioral, cognitive, and misbehavioral Answer: A Explanation: A) The three components are cognitive (beliefs, knowledge), affective (emotional), and behavioral (actions), making "cognitive, affective, and behavioral" the correct response. All other responses contain at least one erroneous component.

Diff: 2 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 52) The component of attitude that is made up of knowledge and information is ________.

A) cognitive B) behavioral C) affective D) practices Answer: A Explanation: A) The three components of an attitude have to do with what you think and know (cognitive), how you feel (affective), and how you act on what you think and feel (behavioral). As the component that is involved with thoughts and information, "cognitive" is the correct response for this question. "Practices" can be ruled out because practices are not thought to be a component of an attitude.

Diff: 2 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 53) When you stand at attention during the playing of the national anthem, you are revealing which component of your attitude toward your country?

A) cognitive B) affective C) metacognitive D) behavioral Answer: D Explanation: D) Standing at attention is more than knowledge (cognition), a belief (cognition), or a feeling (affect) about your country, it is an action or a behavior, making "behavioral" the correct response. Note that metacognitive is not a component of an attitude, so that is an incorrect response.

Diff: 3 AACSB: Analytic thinking Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

54) The ________ component of attitude is based on emotions.

A) cognitive B) behavioral C) affective D) action Answer: C Explanation: C) Attitudes are thought to have three main components: cognition, affect, and behavior. An attitude starts with the knowledge, thoughts, and beliefs that a person has on a subject, the cognitive part of attitude. The emotional feeling that results from this knowledge, thoughts, and beliefs is termed the affect, making "affective" the correct response. Both "behavioral" and "action" can be ruled out because they refer to actions, not emotions or feelings.

Diff: 2 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 55) After spending several hours looking over an architect's plans, Wendy formed a new impression for a new building design. Which component of attitude did she change?

A) affective B) behavioral C) emotive D) cognitive Answer: D Explanation: D) In gathering information and changing her beliefs, Wendy is clearly carrying out the cognitive component of attitude, making "cognitive" the correct response. She has not formed any feelings about the building, which rules out "affective" and "emotive" as correct responses. Wendy has also not acted on her impressions or feelings, eliminating "behavioral" as a correct response.

Diff: 3 AACSB: Analytic thinking Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

56) After carefully examining the architect's plans yesterday, today Wendy has decided that she loves the new design. Which component of forming an attitude did she carry out today?

A) cognitive B) affective C) behavioral D) informational Answer: B Explanation: B) Wendy's love of the new design is an emotional feeling or affect, making "affective" the correct response. She carried out the cognitive component of attitude (gathering information) yesterday rather than today—causing both "cognitive" and "informational" to be eliminated as a correct answer. Wendy has also not yet acted on her impressions or feelings, eliminating "behavioral" as a correct response.

Diff: 2 AACSB: Analytic thinking Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 57) After deciding that she likes the architect's new building design this morning, this afternoon Wendy has decided to go ahead with the project. Which component of attitude did she use this afternoon?

A) cognitive B) behavioral C) emotive D) affective Answer: B Explanation: B) Wendy's decision to "green light" the project is an intention to carry out an action or behavior, making "behavioral" the correct response. The behavioral component is the final part of attitude formation, making the cognitive and affective (emotive, affective) components of attitude incorrect responses for this question because those components had already been completed prior to this afternoon's action.

Diff: 3 AACSB: Analytic thinking Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

58) In everyday parlance, the term attitude refers only to the ________ component of attitude.

A) cognitive B) informational C) behavioral D) affective Answer: D Explanation: D) The term attitude commonly refers to only the affective, or emotional component of an attitude, making "affective" the correct response. The cognitive and behavioral components of attitude are part of every attitude, but they are often not explicitly referred to.

Diff: 1 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 59) A manager would most likely be interested in employees' attitudes about which of the following?

A) family responsibility B) personal responsibility C) job satisfaction D) past jobs Answer: C Explanation: C) Managers are most interested in attitudes that affect the performance of employees on the job. Family or personal responsibility may be important to a person, but they are unlikely to affect job performance as much as job satisfaction.

Similarly, attitudes toward past jobs may affect employee performance to a small degree, but not nearly to the degree that job satisfaction affects the employee in his or her current position, making "job satisfaction" the correct response.

Diff: 2 AACSB: Reflective thinking Objective: 9.2 Learning Outcome: Describe the roles of managers and the skills they need to succeed within an organization

60) The degree to which an employee identifies with his or her job or actively participates in it refers to the employee's ________.

A) job involvement B) organizational commitment C) global commitment D) job satisfaction Answer: A Explanation: A) Job involvement doesn't measure an employee's commitment to a corporation or an organization, but rather, it reflects the employee's identification and "ownership" of a particular job, making "job involvement" the correct response. Job satisfaction measures how happy or unhappy an employee is with a job, not how much the person identifies with the job, making "job satisfaction" an incorrect response.

Diff: 3 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 61) An employee who brags about her company to friends and recommends all company products as gifts is likely to have high ________.

A) job involvement B) organizational commitment C) personal commitment D) organizational citizenship Answer: B Explanation: B) This employee's actions show pride in, and identification with, the organization itself, not the job that she has. Organizational citizenship and job involvement would both be oriented more toward the job itself than the organization, so the correct answer here is "organizational commitment." "Personal commitment" is not correct because it refers to a personal, not an organizational, commitment.

Diff: 3 AACSB: Analytic thinking Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

62) With respect to employee engagement in a job, this seems to be the most important factor to employees around the world.

A) base pay B) respect C) benefits D) type of work Answer: B Explanation: B) While base pay, benefits, and type of work are all important to varying degrees to workers, studies show respect is the number one factor in determining employee engagement in a job. Workers who are shown respect show the most engagement in their jobs.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 63) Which of the following would you expect to see in a company that had highly engaged employees?

A) lower employee retention rates B) greater employee retention rates C) a diverse workforce D) a homogeneous workforce Answer: B Explanation: B) Highly engaged employees are much more likely to be top performers than employees who are not highly engaged. Due to their success, these highly engaged employees tend to stay in their jobs and progress up the company ladder.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 64) Generally, most people try to achieve ________ between their attitudes and their behavior.

A) contrast B) synergy C) functionality D) consistency Answer: D Explanation: D) Most people don't like to feel hypocritical. They strive for consistency between their professed attitudes and beliefs and what they actually do in the real world. This view is supported by research.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

65) Cognitive dissonance theory states that a person feels ________ when his or her attitudes and actions don't match.

A) comfortable B) uncomfortable C) confused D) confident Answer: B Explanation: B) A clash between attitudes and actions is likely to make a person feel like a hypocrite—that is, a person is not living up to who one says he or she is. Seeing oneself as hypocritical would tend to make a person feel uncomfortable rather than confused. Feeling comfortable or confident would probably be somewhat the opposite of the way the person who was feeling dissonance would actually feel, which rules out those two choices as correct responses.

Diff: 2 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 66) The cognitive dissonance theory proposes that the factors that can mitigate the discomfort caused by dissonance are ________.

A) importance, influence, and rewards B) influence, rewards, and goals C) importance, goals, and status D) influence, reinforcement, and rewards Answer: A Explanation: A) The three determining factors for controlling discomfort from cognitive dissonance are importance, influence, and rewards. The other three choices can be eliminated because they all include at least one incorrect determining factor.

Diff: 1 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

67) A person who is being hypocritical about something that has high importance in her life would be likely to experience ________ discomfort from cognitive dissonance.

A) low B) no C) high D) minimal Answer: C Explanation: C) All other things being equal, if a person is being hypocritical about something that is very meaningful to her, she will experience high discomfort from cognitive dissonance, making that the correct response. This discomfort can be tempered if the dissonance is shown to be caused by something that she cannot control (low influence) or she receives some kind of large compensation for her effort (high reward).

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 68) A person who is experiencing cognitive dissonance might justify the dissonance if he has ________ control over his actions.

A) some B) total C) almost total D) little or no Answer: D Explanation: D) If a person perceives the dissonance as something about which they have control, they will change their attitude or behavior. Although dissonance exists and the person has no or little control, it can be rationalized and justified by the need to follow the manager's orders—that is, the person had no choice or control.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

69) Taking a job in a repressive country that you disapprove of politically might cause discomfort from dissonance unless ________.

A) the job suits you well B) the job offers enormous pay C) the job offers little pay D) the job does not suit you well Answer: B Explanation: B) Discomfort from dissonance can be mitigated by a high reward. This makes "the job offers enormous pay" the correct response since it offers high pay and eliminates the choice regarding little pay because it's a low reward. How well the job suits you would not be likely to be a strong enough reward to mitigate any discomfort you might feel from taking the job, so "the job suits you well" and "the job does not suit you well" are incorrect.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 70) After the disappointment of not getting a new position, an employee states, "That job looks like a real headache, anyway." This is an example of ________ to reduce discomfort from dissonance.

A) reducing importance B) increasing importance C) reducing influence D) increasing influence Answer: A Explanation: A) The statement is a rationalization that attempts to minimize the importance of the new position, making "reducing importance" the correct response and ruling out "increasing importance." The statement has no connection to reducing or increasing influence, since influence involves control over the decision and the employee's statement did not reduce or increase his or her control over the decision.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

71) Which of the following is typically the most important reason for why managers want to increase positive job attitudes?

A) lower rates of turnover and absenteeism B) higher rates of turnover and absenteeism C) to decrease worker unhappiness D) to increase worker happiness Answer: A Explanation: A) Ultimately, productivity is the manager's goal and can typically be achieved only with less turnover and absenteeism, making "lower rates of turnover and absenteeism" the correct response and eliminating "higher rates." Whether workers are happy might be important to a manager, but not nearly as important as productivity, so "decrease worker happiness" and "increase worker happiness" are ruled out as possible correct answers.

Diff: 2 Objective: 9.2 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 72) Studies show that the statement, "Happy workers are productive workers," is ________ A) completely false B) completely true C) fairly true D) largely false Answer: C Explanation: C) The evidence shows a fairly strong correlation between job satisfaction and productivity, indicating that "fairly true" is the correct response and eliminating the other choices. The correct answer is only "fairly true" rather than "completely true" because the correlational evidence, though strong, still cannot completely distinguish whether job satisfaction creates high productivity or vice versa —that the sense of accomplishment that people get from high productivity creates job satisfaction.

Diff: 2 Objective: 9.2 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization

73) To reduce dissonance in the workplace, managers are advised to hold ________ responsible for the causes of the dissonance.

A) employees B) both employees and management C) fellow workers D) external forces Answer: D Explanation: D) To reduce dissonance, managers are advised to shift responsibility for the dissonance-producing actions of employees from themselves to outside sources. These sources might include management, competitors, customers, or some other external force. These facts make "external forces" the correct response and eliminate the other three choices as possible correct responses.

Diff: 2 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 74) Rather than try to make employees happy, managers might do well to focus on making work ________.

A) easy to accomplish B) challenging and interesting C) challenging and difficult D) simple rather than complex Answer: B Explanation: B) One of the keys to high productivity is that employees find their work interesting and challenging, making that the correct response. Work that is too easy, too hard, or overly simple has not been shown to be conducive to high worker productivity, so these choices can be ruled out.

Diff: 3 Objective: 9.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization factors. Similarly, "attitudes, past experiences, expectations" is incorrect because it includes factors that involve the perceiver only, not the target or the context. "Past experiences, context, location" is incorrect for similar reasons, because it does not include all three types of factors—perceiver, target, and context.

Diff: 2 Objective: 9.4 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

Fundamentals of Management, 9e (Robbins) Chapter 10 Understanding Groups and Managing Work Teams 1) A group consists of individuals who share specific goals.

Answer: TRUE Explanation: A group is defined as a collection of interacting individuals who are dependent on one another and share specific goals.

Diff: 1 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 2) Formal groups tend to form around friendships and common interests.

Answer: FALSE Explanation: Informal, rather than formal, groups tend to form around common interests and friendships. Formal groups are usually organized by an organization for a specific purpose.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 3) To be considered a group, a gathering must include at least five people.

Answer: FALSE Explanation: The minimum number for a group is two. Any number of individuals two or greater constitutes a group.

Diff: 1 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 4) Groups tend to go through five stages as they develop.

Answer: TRUE Explanation: The five typical stages of development are forming, storming, norming, performing, and adjourning.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 5) The forming stage of group development begins when members consider themselves a part of the group.

Answer: FALSE Explanation: The forming stage ends, rather than begins, when members feel that they are a part of the group.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams

6) Managers should especially try to avoid conflict during the storming stage of group development.

Answer: FALSE Explanation: During the storming stage of group development, managers should expect conflict, rather than try to avoid it.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 7) In the norming stage of group development, the group becomes cohesive.

Answer: TRUE Explanation: During the norming stage the group's identity increases and a common set of group expectations is established.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 8) The group is likely to work on its primary task during the adjourning stage of group development.

Answer: FALSE Explanation: The group works on its primary task during the performing, not the adjourning, stage of group development. During the adjourning stage, the group prepares to disband.

Diff: 1 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 42) Many managers in today's business world have restructured work ________.

A) around individuals rather than teams B) around teams rather than individuals C) around both individuals and teams.

D) around groups rather than teams Answer: B Explanation: B) The trend in today's dynamic global business environment is to focus work around teams rather than hierarchies of individuals, making that the correct response. This shift to teams has also served to make organizations more decentralized, since teams are often decision-making entities, and more organic as teams take some authority away from the top managers. Note that teams, rather than groups, are the trend, reflecting that teams are more task-oriented.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams

43) Of the following, which is NOT thought to be an advantage of teams within an organization?

A) increased organizational coherence B) employee job satisfaction C) more innovation D) new products developed faster at lower costs Answer: A Explanation: A) Use of teams has definitely been associated with job satisfaction, innovation, and faster turnaround in developing new products, eliminating these choices as correct responses. Teams typically do not bring various organizational parts together, making "increased organizational coherence" the only item that is not true and therefore causing it to be the correct response.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 44) Formal groups ________.

A) meet at a regular time and place B) are defined by an organization's structure C) include people who share a common interest D) include people who eat lunch together each day Answer: B Explanation: B) Formal groups are groups that are officially defined and recognized by the organizational hierarchy, making that the correct response. The meeting time of a group does not determine whether the group is formal or not, making that an incorrect choice. People who meet for lunch or share a common interest are forming informal, not formal, groups.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 45) This kind of work group is brought together to accomplish a specific job or single activity, such as the development of a new product.

A) command group B) formal group C) informal group D) task group Answer: D Explanation: D) A group that is brought together for a specific task is called a task group, making that the correct response. A command group refers to whether or not a work group has been formed as a part of the company structure, ruling it out as a correct response. A task group typically is a formal work group, but task groups are not defined by whether they are formal or informal, eliminating "formal" and "informal groups" as correct responses.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams

46) This kind of work group brings individuals together from different work disciplines with different knowledge and skills.

A) formal group B) cross-functional team C) command group D) self-managed team Answer: B Explanation: B) The key to a cross-functional team is not that it is formal, which it likely is, or a type of command group, which means it is part of the organizational hierarchy, or that it manages itself, making it a self-managed team. What defines a cross-functional team is that it brings together workers with different skills and abilities to complement one another and work on a single project or goal. This makes "cross-functional team" the best answer for this question and eliminates the other three choices.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 47) The ________ stage of the group development process is complete when members begin to think of themselves as part of a group.

A) forming B) storming C) norming D) performing Answer: A Explanation: A) The forming stage of the group development process is the first stage of the process. It begins with group members getting together to establish group goals, structure, and purpose. The forming stage is considered complete when members feel like they are official members of the group. This makes "forming" the correct response and rules out all other responses.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 48) This stage involves the most conflict during the entire group development process.

A) forming B) storming C) norming D) performing Answer: B Explanation: B) The storming, or second stage of the group development process, is characterized by a struggle for control of the group and a search by members for their roles within the group. When storming is complete, a fairly orderly hierarchy will be evident within the group. These factors make "storming" the correct response and rule out all other responses.

Diff: 2 Objective: 10.1 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

49) Norming is a stage of group development that occurs when ________.

A) the group struggles for leadership B) the group defines its purpose C) the group develops cohesiveness D) the group defines its goals Answer: C Explanation: C) The group defines its purpose and goals during the forming, not the norming, stage, so the choices regarding purpose and goals are incorrect. Group members vie for leadership during the storming, not the norming, stage, making the choice regarding leadership incorrect. Norming is characterized by a strong sense of group cohesiveness, group identity, and camaraderie, making the choice regarding cohesiveness the correct response.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 50) In the group development process, the group carries out its primary work during this stage.

A) storming B) forming C) norming D) performing Answer: D Explanation: D) Forming, storming, and norming are all preludes for the performing stage of the group development process. The group forms, identifies its goals, figures out how it will operate, and then it is finally ready for performing—to carry out the task it was created for, whether it is developing a new product or achieving some other organizational goal. This makes "performing" the correct response.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams 51) Permanent work groups are not likely to go through this stage.

A) storming B) adjourning C) forming D) norming Answer: B Explanation: B) The adjourning stage of the group development process takes place only in groups that are disbanding. That means that permanent work groups typically don't go through an adjourning stage of the group development process, making that the correct response and eliminating all other responses.

Diff: 2 Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams

52) During a recent meeting, a shouting match arose between a design manager and a marketing representative about a marketing plan for a new product. This team seems to be at the ________ stage of group development.

A) conflict B) forming C) norming D) storming Answer: D Explanation: D) This group appears to be in conflict for control and leadership, suggesting that the group is in the storming stage of the group development process.

Storming is the stage that is most associated with conflict, making it the correct response and eliminating the other responses.

Diff: 3 AACSB: Analytic thinking Objective: 10.1 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 53) During the storming stage of group development, high levels of conflict ________.

A) are necessary for group cohesiveness B) increase group cohesiveness C) can contribute to group effectiveness D) are never a factor in group effectiveness Answer: C Explanation: C) Conflict is clearly a divisive factor and does increase group cohesiveness or make group cohesiveness possible, eliminating those two choices.

During the storming stage, high levels of conflict can definitely contribute to group effectiveness, making that the best answer for this question and eliminating the choice indicating conflict is never a factor since conflict can clearly have influence on effectiveness.

Diff: 3 AACSB: Analytic thinking Objective: 10.1 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization

54) A group that has gone through the norming stage of the group development process ________.

A) never returns to the storming stage B) always returns to the storming stage C) never returns to the forming stage D) may return to the forming or storming stage Answer: D Explanation: D) The group development process is not necessarily sequential. Groups can pass through one stage, then return to that same stage, or an earlier stage, later on in their development. This makes the choice regarding returning to the forming or storming stage the correct response as it is the only response that indicates this flexibility in the group development process.

Diff: 3 AACSB: Analytic thinking Objective: 10.1 Learning Outcome: Describe the best practices of groups and teams Fundamentals of Management, 9e (Robbins) Chapter 11 Motivating and Rewarding Employees 1) Motivation is a process that leads to a goal.

Answer: TRUE Explanation: By definition, motivation is the process by which a person applies persistent, energized efforts in pursuit of a goal.

Diff: 1 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 2) Motivation is a drive that some people have and others don't have.

Answer: FALSE Explanation: All people have motivation in different amounts for different things. A person may be highly motivated to perform one task and not at all motivated to perform another. Therefore, it is incorrect to describe some individuals as generally "motivated" or "unmotivated."

Diff: 1 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 3) The three key elements in the definition of motivation are energy, direction, and achievement.

Answer: FALSE Explanation: The key elements of motivation are energy, direction, and persistence, as described in this textbook.

Diff: 2 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization

4) Persistence is the amount of drive and intensity a person applies to a task.

Answer: FALSE Explanation: Persistence is a measure of how sustained a person's effort is, not the intensity of effort he or she applies.

Diff: 2 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization

5) A single individual can have high motivation for one task and low motivation for another task.

Answer: TRUE Explanation: Motivation generally varies by task. For example, an individual may be motivated to perform sales tasks and not motivated at all to carry out background research on the products he or she sells.

Diff: 2 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 6) Most U.S. employees are excited about their jobs.

Answer: FALSE Explanation: The text reports that 73 percent of U.S. workers are not excited about their jobs, so this statement is false.

Diff: 2 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 39) Motivation is NOT ________.

A) a permanent personal trait B) a process that leads to a goal C) something that varies from situation to situation D) something that requires a direction Answer: A Explanation: A) Motivation by definition is a process with a direction that leads to a goal. Rather than an innate characteristic, motivation can vary from task to task and situation to situation. This leaves "a permanent personal trait" as the correct response.

Since motivation can change from situation to situation for the same person, it cannot be a permanent personal trait.

Diff: 2 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization

40) Which element of motivation is a measure of intensity or drive?

A) direction B) energy C) persistence D) achievement Answer: B Explanation: B) Achievement is the goal that a person wants to attain, while direction is the path to that goal. The drive and intensity that the person applies to attaining that goal is energy, making "energy" the correct response. Finally, persistence is how sustained over time an effort is, not a measure of intensity.

Diff: 1 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 41) The direction of an individual's motivation can be channeled to benefit ________.

A) only an organization B) both individuals and/or organizations C) only an individual D) an individual's family only Answer: B Explanation: B) Motivation can be personal or more general and include an organization. Most organizational management theorists concern themselves with organizational motivation, which is motivation to attain an organization's goals only.

Personal motivation refers to an individual and/or his or her family only. Since general motivation can involve both an individual and his or her organization, that is the correct response.

Diff: 2 Objective: 11.1 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 27) A transactional leadership style is not related to a transformational style.

Answer: FALSE Explanation: If done well, a transactional style can evolve into a transformational style, so the two are closely related.

Diff: 2 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 28) Transformational leadership and charismatic leadership are identical.

Answer: FALSE Explanation: Transformational leadership is similar to charismatic leadership, but transformational leadership gives the follower more freedom to think independently and critically, even if a follower's views clash with the views of the leader.

Diff: 2 AACSB: Communication abilities Objective: 12.4

Learning Outcome: Summarize the basic characteristics of major leadership theories

29) Charismatic and visionary leadership are the same thing.

Answer: FALSE Explanation: Though charismatic leadership starts with a vision, the person is the true focus of charismatic leadership, while in visionary leadership it is the specific view of the future that the leader promotes that attracts followers.

Diff: 2 AACSB: Reflective thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 30) Since charisma is an inborn trait, no efforts have ever been made to train people to be charismatic.

Answer: FALSE Explanation: Though some people think that charisma cannot be taught, others feel that training can provide leaders with elements of charisma. These training efforts have proved to be fairly successful.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 31) A successful visionary leader "jump-starts" the future.

Answer: TRUE Explanation: Successful visionary leaders create a powerful image of a possible future that is easy to grasp. Followers latch on to this vision of the future and work to make it a reality.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 32) Team leadership is becoming less important in today's world because teams don't need leaders.

Answer: FALSE Explanation: All teams need leaders. If anything, team leadership is becoming more important in the current business climate because teams are becoming more prevalent.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 33) One of the keys to being a good team leader is to know when to leave a team alone.

Answer: TRUE Explanation: Knowing when to intervene and when to let a team solve its own problems is important for a team leader.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 34) Experts state that 85 percent of all managers are not natural team leaders.

Answer: TRUE Explanation: Consultants think that 15 percent of managers are natural team leaders, which leaves 85 percent who are not natural team leaders.

Diff: 3 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 35) One specific role of team leadership is that team leaders are troubleshooters.

Answer: TRUE Explanation: Team leader roles include coaches, conflict managers, liaisons, and troubleshooters.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 36) One reason that empowerment is important in today's business climate is that managers today tend to have smaller spans of control than managers of the past.

Answer: FALSE Explanation: In fact, today's managers, due to downsizing and efficiency efforts, have larger, not smaller, spans of control than managers of the past. A larger span of control means the manager has less time to spend with individual employees, so empowering those employees helps them solve problems on their own.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 37) In different countries, the most universal aspects of leadership seem to be elements of transactional leadership.

Answer: FALSE Explanation: Transformational, rather than transactional, elements of leadership seem to be most universal. These include vision, trustworthiness, dynamism, positiveness, and proactiveness.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations 38) Emotional intelligence (EI) is the best predictor of who will emerge as a leader.

Answer: TRUE Explanation: More than academic intelligence, EI has shown to be the best predictor of who will be a successful leader.

Diff: 2 Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 39) Trust is the belief in the integrity, character, and ability of a leader.

Answer: TRUE Explanation: Trust has five dimensions: integrity, which includes honesty, competence, consistency, loyalty, and openness.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 40) Of the five dimensions that make up the concept of trust, loyalty seems to be the most critical.

Answer: FALSE Explanation: Integrity, rather than loyalty, appears to be the most important element of trust.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 41) A sizeable majority of American employees trust the leaders of the companies they work for.

Answer: FALSE Explanation: According to a survey, only about 39 percent of U.S. employees claimed to trust their executive leaders, which is considerably less than a majority.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories theories 103) Transactional leaders are leaders who guide by ________.

A) inspiring followers B) articulating a vision for followers C) the force of their personality D) offering rewards to followers Answer: D Explanation: D) The essence of transactional leadership is to offer rewards of some type in exchange for the output of workers, making "offering rewards" the correct response. "Inspiring followers" describes a transformational leader rather than a transactional leader. "Articulating a vision" describes a visionary leader rather than a transactional leader. "The force of their personality" describes a charismatic leader rather than a transactional leader.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

104) Visionary leaders are leaders who guide by ________.

A) inspiring followers B) articulating a vision of the future C) the force of their personality D) offering rewards to followers Answer: B Explanation: B) The key to visionary leadership is to create a credible, attractive vision of the future that makes followers want to work toward its realization, making that choice the correct response. Visionary leaders differ from charismatic leaders and transformational leaders in that they focus on the vision of the future itself rather than their own personality or the inspiration they offer. Visionary leaders do not offer tangible rewards in the present, making "offering rewards" incorrect.

Diff: 3 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 105) Transformational leaders are leaders who guide by ________.

A) inspiring followers B) articulating a vision for followers C) the force of their personality D) offering rewards to followers Answer: A Explanation: A) The key to transformational leadership is to inspire followers to follow the leader's path, making "inspiring followers" the correct response.

Transformational leaders differ from charismatic leaders and visionary leaders in that they evolve from transactional situations. That is, transformational leaders at first use rewards to show followers success. The success itself, as well as the vision supplied by the transformational leader, serves to inspire followers and get them to do what the leader says.

Diff: 3 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 106) Which of the following is an accurate statement about transformational leaders?

A) They are poor motivators.

B) Their organizations suffer from high turnover rates.

C) Their organizations are highly productive.

D) Their organizations are not productive.

Answer: C Explanation: C) Transformational leaders tend to be superb motivators, not poor motivators, and have workers who are productive and low in turnover rates rather than unproductive and high in turnover rates. This makes highly productive organizations the only accurate statement.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

107) Which term is most closely associated with transformational leaders?

A) charming B) efficient C) far-seeing D) inspiring Answer: D Explanation: D) A transformational leader is first and foremost inspiring, making "inspiring" the correct response. Charming describes a charismatic leader more than a transformational leader. Efficient may describe a transactional leader. Far-seeing best matches a visionary leader.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 108) Which of the following is NOT a typical trait of a charismatic leader?

A) direct eye contact B) relaxed body posture C) animated facial expressions D) erect body posture Answer: D Explanation: D) Direct eye contact, exuberant facial expressions, and a relaxed posture characterize a charismatic leader. One key to this leader's effectiveness is that people find him or her comfortable to be around. Rigid or erect body posture does not exude comfortableness, so that choice is the correct response.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 109) Research has shown that ________.

A) charisma is an illusion B) charisma is inborn only C) charisma is not inborn D) charisma can be learned Answer: D Explanation: D) Charisma is definitely a genuine trait, not an illusion, that exists in some humans and not others. Charisma is largely inborn, but research has shown that charisma can be learned, making the fact that charisma can be learned the correct response.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

110) "Trained" charismatic leaders had workers who were ________ those who had been led by noncharismatic leaders.

A) dramatically less productive than B) more productive than C) equally productive when compared to D) slightly less productive than Answer: B Explanation: B) "Trained" charismatic leaders had workers who were more, not less, productive than those who had worked under noncharismatic leaders, making "more productive" the correct response and proving that charisma can be instilled, at least to a degree. The other three choices are all incorrect because they do not indicate an actual gain in productivity.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 111) Visionary leadership differs from charismatic leadership because of its focus on ________.

A) rewards B) personality C) dangers that the future might bring D) a positive image of the future Answer: D Explanation: D) The focus of visionary leadership is to create a credible, plausible, doable vision of the future that people can easily grasp and work toward, making "a positive image of the future" the correct response. Transactional leadership focuses on rewards, not visionary leadership. Charismatic leadership focuses on personality, not visionary leadership. Dangers of the future is ruled out as a correct response because it gives a negative rather than a positive view of the future.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

112) Which of the following is NOT a typical characteristic of a vision of the future provided by visionary leadership?

A) powerful images B) easy-to-understand view C) nonspecific and indefinite D) clear articulation Answer: C Explanation: C) A view of the future provided by visionary leadership typically features powerful images and clear, easy-to-grasp articulation of ideas, ruling out these choices as correct answers. What visionary leadership does not typically feature is a nonspecific or vague vision of the future. People must be able to imagine what will happen clearly. An indefinite vision prevents this, so it is almost always avoided, making "nonspecific and indefinite" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 113) If a visionary-leader CEO switched from one company to another, you would expect ________ to follow her to the new company.

A) all employees and managers B) no employees C) no managers D) some employees and managers Answer: D Explanation: D) In this situation, you would expect all or almost all of the followers to follow a charismatic leader wherever she chose to go. However, the leader described in this question is visionary, not charismatic, so you would expect some, but clearly not all, managers and employees to make the move. After all, if it were the vision that attracted the followers, the vision exists at the old company, not the new company.

Diff: 2 AACSB: Communication abilities Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

114) Team leadership and traditional leadership in hierarchical organizations are thought to be ________.

A) virtually identical B) very different C) fairly similar D) somewhat different Answer: B Explanation: B) There are several big differences between team leadership and traditional organizational leadership, including less authority, more empowered employees, more facilitating and coaching, and less direct supervision. This makes team leadership very different from traditional leadership and rules out all other choices for this question.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 115) Consultant estimates state that ________ team leaders.

A) 15 percent of managers are not natural B) 70 percent of managers are not natural C) 85 percent of managers are not natural D) 30 percent of managers are natural Answer: C Explanation: C) Consultant estimates hold that about 15 percent of managers are natural team leaders, which means that 85 percent are not natural team leaders, making "85 percent" the correct response. Note that about 15 percent of managers are not only not natural team leaders, they are probably incapable of becoming team leaders.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 116) A difficult skill for a team leader to learn is knowing when to ________ the team.

A) show interest in B) trust C) intervene with D) abandon Answer: C Explanation: C) A team leader should always show interest in and trust the team, and never abandon it in any way. The hard part for team leaders is knowing when to intervene in a team's activities and when to leave it alone to solve problems on its own, making "intervene with" the correct response.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

117) A team's ________ marks the border between tasks that are strictly the team's responsibility and those that the team shares with other parts of the organization.

A) external boundary B) exterior C) leader D) performance Answer: A Explanation: A) A team leader's job includes knowing where the border exists between tasks that are strictly within the team and those tasks and activities that extend outside of the team. This border is called the external boundary. A team's leader, exterior, or performance do not identify its inner-outer border, so those choices are incorrect.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 118) This team leader role requires leaders to try to get the best out of their team.

A) coach B) troubleshooter C) liaison D) conflict manager Answer: A Explanation: A) A troubleshooter helps the team solve specific task problems, so that choice is not the correct response. A liaison makes contact for the team with parties outside of the team, so that choice is not a correct response. A conflict manager resolves personal and discipline problems within the team, so that choice is not a correct response. A coach helps team members perform at their best, so "coach" is the correct response.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

119) When a design team is having problems getting its new simulation software to work correctly, the team leader takes on this role.

A) coach B) troubleshooter C) liaison D) conflict manager Answer: B Explanation: B) The software problem is a specific technical problem that the team is experiencing. A troubleshooter helps the team solve specific task and technical problems, so that choice is the correct response. Rather than solve technical problems, a liaison makes contact for the team outside of the organization, so that choice is not a correct response. Similarly, a conflict manager resolves personal and discipline problems, not technical problems, so that choice is not a correct response. Rather than solve technical problems, a coach helps team members perform at their best, so that choice is not the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 120) When a team is considering joining forces with another team in the organization, the team leader takes on this role.

A) troubleshooter B) conflict manager C) coach D) liaison Answer: D Explanation: D) A liaison makes contact for the team with the parent organization or parties outside of the team, so "liaison" is the correct response. A troubleshooter helps the team solve specific task problems, not link to outside parties, so that choice is not the correct response. A conflict manager resolves personal and discipline problems within the team, so that choice is not a correct response. A coach helps team members perform at their best, so that choice is not the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

121) When two members of a team are having a personal conflict, the team leader takes on this role.

A) conflict manager B) liaison C) troubleshooter D) coach Answer: A Explanation: A) A conflict manager resolves personal and discipline problems within the team, so that choice is the correct response. A troubleshooter helps the team solve specific task problems, not personal problems, so that choice is not the correct response. A liaison makes contact for the team with parties outside of the team, so that choice is not a correct response. A coach helps team members perform at their best, so that choice is not the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 122) The key difference between team leadership and traditional leadership is that in teams, ________ decisions.

A) employees are empowered to make B) leaders are not empowered to make C) leaders have no influence over employees' D) leaders do not participate in important Answer: A Explanation: A) Team leaders typically participate in team decision making and have influence over team decisions, but they are not the sole authority and final word in decisions as they were in the traditional arrangement. Thus, the most important difference in a team structure is that employees can make decisions, even though they are typically not unilateral decisions, making "employees are empowered" the correct response.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

123) ________ is one key reason that employees are frequently empowered with decision-making ability in today's business world.

A) Smaller spans of control B) Larger spans of control C) Smaller budgets D) Larger budgets Answer: B Explanation: B) Budgets have little, in any direct sense, to do with empowering employees except that they might call for increased efficiency, so the two choices regarding budgets are not correct. Due to downsizing, today's managers typically have larger, not smaller, spans of control, making "larger spans of control" the correct response and eliminating "smaller spans of control." These larger spans of control mean that a single manager must relinquish some decision-making authority to employees, which is the reason why employee empowerment is so prevalent in today's climate.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 124) On a pro football team, empowerment might manifest itself in which of the following?

A) players getting larger salaries B) more complicated plays and formations on the field C) coach-to-helmet communication systems D) a player changing a planned play on the field Answer: D Explanation: D) Empowerment confers employees with the right to make decisions.

Getting more money, taking on more complicated workloads, and increased communication sophistication are not forms of empowerment because they do not give players increased decision-making power. Changing a play does involve making a decision, so "changing a planned play" is the correct response.

Diff: 3 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

125) A unique problem that virtual leaders face is being understood without a ________ form of communication.

A) reliable B) written C) clear D) nonverbal Answer: D Explanation: D) Emails and other forms of electronic communication largely lack the emotional information that can be transmitted through nonverbal means, making "nonverbal" the correct response. Electronic communication is typically written communication and does not suffer from being unclear or unreliable, making the remaining choices incorrect.

Diff: 2 AACSB: Use of information technology Objective: 12.4 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 126) Being humble is a typical characteristic of ________.

A) Arab leaders B) German leaders C) Japanese leaders D) Korean leaders Answer: C Explanation: C) Key characteristics of Japanese leaders include humility, making "Japanese leaders" the correct response. Key characteristics of Arab leaders include avoiding inessential kindness. Key characteristics of German leaders include high participation and performance expectation. Key characteristics of Korean leaders include a paternalistic attitude toward employees.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management

127) A ________ would avoid publicly praising a productive employee.

A) Malaysian leader B) Dutch leader C) Japanese leader D) German leader Answer: B Explanation: B) Key characteristics of Dutch leaders include avoiding public embarrassment of any kind, even when it is caused by praise, making "Dutch leader" the correct response. Key characteristics of Japanese leaders include humility. Key characteristics of German leaders include high participation and performance expectation. Key characteristics of Malaysian leaders include compassion.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management 128) A ________ is characterized by high performance orientation.

A) German leader B) Scandinavian leader C) Japanese leader D) Malaysian leader Answer: A Explanation: A) Key characteristics of German leaders include high performance expectation and low compassion, making "German leader" the correct response. Key characteristics of Scandinavian leaders include avoiding the singling out of individuals in public. Key characteristics of Japanese leaders include humility. Key characteristics of Malaysian leaders include compassion.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management

129) Most leadership theories were developed in the United States, causing them to stress ________.

A) spirituality over rationality B) rationality over spirituality C) both rationality and spirituality D) altruism over self-gratification Answer: B Explanation: B) American biases in leadership theories include emphasizing rationality and de-emphasizing nonrational forms of thought, which include spirituality, making "rationality over spirituality" the correct response and ruling out the other two choices regarding spirituality. The remaining choice is incorrect because, if anything, self-gratification is favored over altruism, not the other way around.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management 130) All of the following appear to be universal elements of transformational leadership EXCEPT ________.

A) dynamism B) vision C) trustworthiness D) aggressiveness Answer: D Explanation: D) Countries around the world seem to respond to such qualities as dynamism, vision, and trustworthiness in transformational leaders. Aggressiveness is not a quality that typically contributes to the effectiveness of a transformational leader, so that choice is the correct answer.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 12.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management

131) Recent studies indicate that this measure of ability is the best predictor of who will be a leader in an organization.

A) standardized test intelligence B) academic intelligence C) technical expertise D) emotional intelligence Answer: D Explanation: D) Studies show that such things as standardized test intelligence, academic proficiency, and technical skill are threshold capabilities, meaning that a person needs only a certain minimum amount of them to succeed. Emotional intelligence, or EI, on the other hand, has been shown to be a true predictor of leadership, making that choice the correct response.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 132) Which of the following is NOT a key component of emotional intelligence (EI)?

A) empathy B) self-awareness C) active imagination D) social skills Answer: C Explanation: C) Empathy, self-awareness, and social skills are three of the five recognized key components of EI. An active imagination, while being an important skill for success, is not a key component of EI, so that choice is the correct response.

Diff: 2 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 133) Studies show that the higher the rank a star performer has in an organization, the more he or she relies on ________ for success.

A) integrity B) intelligence C) emotional intelligence D) loyalty Answer: C Explanation: C) Emotional intelligence (EI) seems to increase in importance as managers go up the scale of an organization. Thus, successful top managers rely on EI more than successful middle managers, for example. This makes "emotional intelligence" the correct response and rules out all other responses.

Diff: 1 Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

134) This is the dimension of trust that includes technical skills.

A) integrity B) loyalty C) openness D) competence Answer: D Explanation: D) Competence refers to the technical and interpersonal skills and knowledge that a leader has, making that choice the correct response. Integrity refers to how truthful and honest a leader is. Loyalty refers to how willing a leader is to protect followers. Openness refers to how willing a leader is to share important ideas and information.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 135) This is the dimension of trust that includes how reliable a leader is.

A) integrity B) competence C) consistency D) loyalty Answer: C Explanation: C) Consistency refers to whether or not a leader has good judgment, and how reliable and predictable the leader is, making "consistency" the correct response.

Integrity refers to how truthful and honest a leader is. Loyalty refers to how willing a leader is to protect followers. Competence refers to the technical and interpersonal skills and knowledge that a leader has.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 136) This is the dimension of trust that includes how honest a leader is.

A) integrity B) openness C) loyalty D) competence Answer: A Explanation: A) Integrity refers to how honest and truthful a leader is, making "integrity" the correct response. Openness refers to how willing a leader is to share important ideas and information. Loyalty refers to how willing a leader is to protect followers. Competence refers to the technical and interpersonal skills and knowledge that a leader has.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 137) Which of the following is NOT a reason that the importance of trust has

increased in today's business climate?

A) Job performance is related to trust.

B) Job satisfaction is related to trust.

C) Only 60 percent of U.S. employees trust their leaders.

D) Downsizing has eroded the faith that workers have in their leaders.

Answer: C Explanation: C) Job performance and satisfaction are clearly related to trust, so those two choices are both valid reasons for why trust is important. The erosion of faith for workers in their leaders has also made trust more important than ever in today's world, making the choice regarding downsizing a valid reason for why trust is important. The choice regarding 60 percent of U.S. employees trusting their leaders is inaccurate because the actual percentage value of employees that trust their leaders is 39 percent, making that choice the correct response.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 12.5 Learning Outcome: Summarize the basic characteristics of major leadership theories 138) In a short essay, identify and describe three traits associated with leadership.

Answer: (any three of the following) Drive—Leaders tend to show high levels effort, energy, ambition, initiative, and desire for achievement.

Desire to lead—Leaders have a strong desire to influence others and show them the path to success. They demonstrate the willingness to take over a situation and assume responsibility for its success.

Honesty and integrity—Leaders recognize that trust, honesty, and consistency are important for acquiring power and influence over people, so they pay special attention to these traits.

Self-confidence—Leaders show strong faith in their own ability to reach goals and help others reach goals.

Intelligence—Leaders need to be able gather information and analyze situations so they can effectively make decisions, solve problems, and create a vision for subordinates to follow.

Job-relevant knowledge—Effective leaders have a high degree of knowledge about the company, industry, and technical matters. In-depth knowledge allows leaders to make well-informed decisions and to understand the implications of those decisions.

Diff: 3 AACSB: Analytic thinking Objective: 12.2 Learning Outcome: Summarize the basic characteristics of major leadership theories

139) In a short essay, describe the University of Iowa leadership studies.

Answer: The University of Iowa studies (conducted by Kurt Lewin and his associates) explored three leadership styles. The autocratic style described a leader who tended to centralize authority, dictate work methods, make unilateral decisions, and limit employee participation.

The democratic style described a leader who tended to involve employees in decision making, delegate authority, encourage participation in deciding work methods and goals, and use feedback as an opportunity for coaching employees.

Finally, the laissez-faire style leader generally gave the group complete freedom to make decisions and complete the work in whatever way it saw fit. Lewin and his associates researched which style was the most effective. Their results seemed to indicate that the democratic style contributed to both good quantity and quality of work.

Diff: 3 AACSB: Analytic thinking Objective: 12.2 Learning Outcome: Summarize the basic characteristics of major leadership theories 140) In a short essay, describe the Ohio State University leadership studies.

Answer: The Ohio State studies identified two important dimensions of leader behavior. The first was called initiating structure, which referred to the extent to which a leader defined and structured his or her role and the roles of group members in the search for goal attainment. It included behavior that involved attempts to organize work, work relationships, and goals.

The second dimension was called consideration, which was defined as the extent to which a leader had job relationships characterized by mutual trust and respect for group members' ideas and feelings. A leader who was high in consideration helped group members with personal problems, was friendly and approachable, and treated all group members as equals. He or she showed concern for (was considerate of) followers' comfort, well-being, status, and satisfaction.

The Ohio State studies generally indicated that a leader with a high-high (both initiating structure and consideration) leadership style had the highest performing employees with the greatest job satisfaction. However, leaders high in initiating structure only seemed to engender employee complaints, while those who rated high in consideration only tended to be negatively rated in employee polls.

Diff: 3 AACSB: Analytic thinking Objective: 12.2 Learning Outcome: Summarize the basic characteristics of major leadership theories

141) In a short essay, describe the University of Michigan leadership studies.

Answer: Leadership studies conducted at the University of Michigan's Survey Research Center at about the same time as those being done at Ohio State had a similar research objective: identify behavioral characteristics of leaders that were related to performance effectiveness. The Michigan group also came up with two dimensions of leadership behavior, which they labeled employee oriented and production oriented.

Leaders who were employee oriented were described as emphasizing interpersonal relationships; they took a personal interest in the needs of their followers and accepted individual differences among group members. The production-oriented leaders, in contrast, tended to emphasize the technical or task aspects of the job, were concerned mainly with accomplishing their group's tasks, and regarded group members as a means to that end.

The conclusions of the Michigan researchers strongly favored leaders who were employee oriented as they were associated with high group productivity and high job satisfaction.

Diff: 3 AACSB: Analytic thinking Objective: 12.2 Learning Outcome: Summarize the basic characteristics of major leadership theories 142) In a short essay, describe the managerial grid that emerged from the early leadership studies.

Answer: The behavioral dimensions from the early leadership studies (Iowa, Ohio State, and Michigan) provided the basis for the development of a two-dimensional grid for appraising leadership styles. This managerial grid used the behavioral dimensions "concern for people" and "concern for production" and evaluated a leader's use of these behaviors, ranking them on a scale from 1 (low) to 9 (high).

Although the grid had 81 potential leadership categories, emphasis was placed on five styles: impoverished management, low concern for both people and production (1,1); task management, high concern for production only (9,1); middle-of-the-road management, medium concern for both people and production (5,5); country club management, high concern for people only (1,9); and team management, high concern for both people and production (9,9).

Of these five styles, the researchers concluded that managers performed best when using a 9,9 style—high concern for both people and production. Unfortunately, the grid offered no answers to the question of what made a manager an effective leader; it only provided a framework for conceptualizing leadership style. In fact, there has been little substantive evidence to support the conclusion that a 9,9 style is most effective in all situations.

Diff: 3 AACSB: Analytic thinking Objective: 12.2 Learning Outcome: Summarize the basic characteristics of major leadership theories

143) In a short essay, describe the basics of situational leadership theory (SLT).

Answer: The situational leadership theory is a contingency theory that focuses on followers' readiness. The theory argues that successful leadership is achieved by selecting the right leadership style, which is contingent on the level of the followers' readiness. Readiness is defined in terms of how able and willing employees are to perform tasks.

The theory presents four basic leadership styles: Telling (high task—low relationship)—the leader defines roles and tells people what, how, when, and where to do various tasks.

Selling (high task—high relationship)—the leader provides both directive and supportive behavior.

Participating (low task—high relationship)—the leader and follower share in decision making; the main role of the leader is facilitating and communicating.

Delegating (low task—low relationship)—the leader provides little direction or support.

The theory presents four basic follower readiness states: R1—People are both unable and unwilling to take responsibility for doing something.

They're neither competent nor confident.

R2—People are unable but willing to do the necessary job tasks. They're motivated but currently lack the appropriate skills.

R3—People are able but unwilling to do what the leader wants.

R4—People are both able and willing to do what is asked of them.

Diff: 3 AACSB: Analytic thinking Objective: 12.3 Learning Outcome: Summarize the basic characteristics of major leadership theories 144) In a short essay, describe the conclusions of situational leadership theory (SLT) for each follower readiness category, R1, R2, R3, and R4.

Answer: R1—People who are both unable and unwilling to perform a task do best with a telling style of leadership where no-nonsense directions are given.

R2—People who are unable but willing to perform tasks require a selling leadership style in which the leader provides a lot of instruction and support.

R3—People who are able but unwilling to perform a task require a participating leadership style to make them identify with the task and want to take it on themselves.

R4—People who are both able and willing to do what is asked of them require a delegating leadership style. They only need to be shown the task and they will do the rest.

Diff: 3 AACSB: Analytic thinking Objective: 12.3 Learning Outcome: Summarize the basic characteristics of major leadership theories

145) In a short essay, discuss the basics of the path-goal leadership theory developed

by Robert House.

Answer: Developed by Robert House, path-goal theory is a contingency model of leadership that takes key elements from the expectancy theory of motivation. A leader's job in the path-goal theory is to clear the way between workers and their goals.

House identified four leadership behaviors: Directive leader—lets subordinates know what is expected of them, schedules work to be done, and gives specific guidance on how to accomplish tasks.

Supportive leader—friendly and shows concern for the needs of followers.

Participative leader—consults with group members and uses their suggestions before making a decision.

Achievement-oriented leader—sets challenging goals and expects followers to perform at their highest level.

Diff: 3 AACSB: Analytic thinking Objective: 12.3 Learning Outcome: Summarize the basic characteristics of major leadership theories 146) In a short essay, discuss the conclusions derived from path-goal leadership theory.

Answer: Path-goal theory suggested that directive leadership worked best when tasks were ambiguous, conflicts arose in groups, and workers had an external locus of control.

Path-goal theory suggested that supportive leadership worked best when tasks were highly structured.

Path-goal theory suggested that participative leadership worked best when workers had an internal locus of control.

Path-goal theory suggested that achievement-oriented leadership worked best when workers wanted to be challenged.

Diff: 3 AACSB: Analytic thinking Objective: 12.3 Learning Outcome: Summarize the basic characteristics of major leadership theories

147) In a short essay, describe transactional and transformational leaders.

Answer: Transactional leaders are those who guide or motivate their followers in the direction of established goals primarily by providing rewards. Rewards can be monetary or involve status or some other item that is desired by the follower.

When transactional leadership is successful, it can develop into transformational leadership. Transformational leadership stimulates, excites, and, finally, inspires followers to high performance. The inspiration that followers get from a transformational leader is the best kind of inspiration—it retains a critical element so that followers are not merely blindly following their leader (as may occur with a charismatic leader). They are following because they believe in both the leader and the path.

Diff: 3 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories 148) In a short essay, describe two of the four specific leadership roles that team leaders play.

Answer: (any two of the following) Team leaders function as liaisons with external constituencies. These may include upper management, other organizational work teams, customers, or suppliers. The leader represents the team to other constituencies, secures needed resources, clarifies others' expectations of the team, gathers information from the outside, and shares that information with team members.

Team leaders also function as troubleshooters. When the team has problems and asks for assistance, team leaders sit in on meetings and try to help resolve the problems.

Troubleshooting may involve technical or operational issues, although in many cases the team members may know more about the tasks being done than the team leader.

The leader is most likely to contribute by asking penetrating questions, helping the team talk through and clarify problems, and getting needed resources to tackle problems.

Team leaders often function as conflict managers. They help identify issues such as the source of the conflict, who is involved, the issues, the resolution options available, and the advantages and disadvantages of each. By getting team members to address questions such as these, the leader minimizes the disruptive aspects of intrateam conflicts.

Team leaders function as coaches. As a coach, a team leader's primary job is to get workers to perform at the highest possible level. Team leaders clarify expectations and roles, teach, offer support, and do whatever else is necessary to help team members keep their work performance high.

Diff: 3 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories

149) In a short essay, discuss how emotional intelligence (EI) affects leadership.

Answer: Recent studies indicate that EI—more than IQ, expertise, or any other single factor—is the best predictor of who among a group will become a leader. The five components of emotional intelligence—self-awareness, self-management, selfmotivation, empathy, and social skills—all contribute to enabling an individual to become a leader. The more of these traits a person seems to have, the higher he or she typically can rise as a leader.

EI has been shown to be positively related to job performance at all levels. When really top performers, so called "star performers" in organizations, are compared with ordinary leaders, the difference between the two categories seems to be almost entirely due to EI factors.

Diff: 3 AACSB: Analytic thinking Objective: 12.4 Learning Outcome: Summarize the basic characteristics of major leadership theories Fundamentals of Management, 9e (Robbins) Chapter 13 Communication and Information 1) Everything a manager does involves communication.

Answer: TRUE Explanation: All managerial activities involve some form of communication. All decisions and plans require information, and that information must be communicated.

Diff: 1 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 2) In order to be sent, a message needs to be decoded.

Answer: FALSE Explanation: In order to be sent, a message must first be encoded rather than decoded. Decoding is carried out by the receiver who interprets the message.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 3) Success in communication always involves reasoning skills.

Answer: TRUE Explanation: All forms of communication, whether they are written, spoken, or visual, require reasoning skills both to send and interpret.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

4) Some messages do not need to be converted to symbolic forms to be sent.

Answer: FALSE Explanation: All messages need to be converted to symbols before they are sent.

Spoken messages are converted to words. Written messages are converted to letters.

Nonverbal messages are converted to gestures and movements.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

5) A channel is an actual physical product.

Answer: FALSE Explanation: A channel is the medium through which a message travels, not a physical product. The medium for a written message, for example, is a book or newspaper. The medium for a gesture is the human body or face. The medium for a spoken sound message is the air.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 6) Feedback is a response that confirms a message.

Answer: TRUE Explanation: Feedback is some kind of response that confirms that a message was received and properly understood.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 7) One advantage of a written communication is that it provides a record of the information.

Answer: TRUE Explanation: Unlike verbal communications, written communications can be saved and referred to later to verify a message.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 8) One disadvantage of verbal communication is that it is hard to get feedback.

Answer: FALSE Explanation: Verbal forms of communication provide better and more instant forms of feedback than written communication, so getting feedback is an advantage, not a disadvantage, of verbal communication.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

9) Body language and facial expressions are the only forms of nonverbal communication.

Answer: FALSE Explanation: In addition to body language and facial expressions, tone of voice is a major form of nonverbal communication that conveys a great deal of information.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 10) Verbal intonation can be a part of written communication.

Answer: FALSE Explanation: Verbal intonation is strictly a tonal enhancement to spoken words, so the statement is false.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 11) Nonverbal communication is a minor part of the communication that takes place during a conversation.

Answer: FALSE Explanation: Studies show that during a face-to-face conversation, considerably more than half of the message is communicated through nonverbal communication.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 12) An example of filtering is telling your boss what he or she wants to hear.

Answer: TRUE Explanation: Filtering is the manipulation or editing of information by the sender so that it is perceived as favorable by receiver. Telling the boss what he or she wants to hear, rather than the straight story, is an example of editing the truth.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

13) Selective perception involves deception on the part of the person sending a message.

Answer: FALSE Explanation: The deception that occurs in selective perception is done strictly by the perceiver. With selective perception, the perceiver, not the sender, is responsible for any distortion that takes place.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 14) Emotions can cause a single message to be interpreted in two different ways.

Answer: TRUE Explanation: Emotions can distort the interpretation of a message. For example, when your boss is upset, she is a lot less likely to be tolerant of a mistake than she is when things are going well.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 15) Jargon never improves communication.

Answer: FALSE Explanation: Within groups of specialists, jargon can be useful shorthand for communicating ideas. Where jargon distorts is when it is used outside of the "in" group.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 16) Active listening requires a listener to have empathy, the ability to listen without making premature judgments when listening.

Answer: FALSE Explanation: Empathy is the ability to see things from another person's perspective, the ability to listen for full meaning without making premature judgments or interpretations.

Diff: 2 Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

17) Responsibility for completeness requires an active listener to make sure he or she has heard the speaker's entire message.

Answer: TRUE Explanation: Many listeners understand the first part of a speaker's message then tune out, failing to understand the complete sentiment that is being expressed.

Responsibility for completeness puts the responsibility of hearing the entire message on the listener's shoulders.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 18) Verbal intonation refers to how loud the speaker speaks.

Answer: FALSE Explanation: Verbal intonation is involved with how the speaker emphasizes specific words and phrases, not the volume of speech.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 19) Filtering refers to how a listener hears only what he or she wants to hear.

Answer: FALSE Explanation: Filtering involves manipulating information to make the message seem more favorable.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 20) When information is passed to senior level managers, it is usually edited and filtered to put the speaker in the best possible light.

Answer: TRUE Explanation: Speakers must summarize and invariably do so to their own advantage.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

21) Selective perception involves a listener hearing what he or she wants to hear.

Answer: TRUE Explanation: Selective perception is the counterpart to filtering from the listener's point of view.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 22) In today's world, modern devices prevent the possibility of information overload.

Answer: FALSE Explanation: With emails, text messages, and other forms of communication, information overload is common in today's business world.

Diff: 2 AACSB: Use of information technology Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 23) Jargon has no place in effective communication.

Answer: FALSE Explanation: Jargon is shorthand language and can be useful among individuals who are working close together on the same project.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 24) Communication in the U.S. business world typically does not strive for clarity.

Answer: FALSE Explanation: In the United States, communication is usually clearly spelled out.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 25) Emotions rarely interfere with effective communication.

Answer: FALSE Explanation: When emotions run high, things can be communicated that are later regretted.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 26) Language that is acceptable for one audience can be a barrier to effective

communication for another audience.

Answer: TRUE Explanation: Language needs to be tailored to the target audience. The less that speaker and listener share culturally and linguistically, the more simplified language needs to be for effective communication.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 27) There is no difference between males and females in communication style.

Answer: FALSE Explanation: Men and women have pronounced differences in the way in which they communicate.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 28) In the United States, most managers tend to prefer informal over formal communication.

Answer: FALSE Explanation: In the United States, managers tend to want to get matters in writing, using formal communication to establish their status and position and assert their independence.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 29) In Japan, managers use formal communication to seek consensus.

Answer: FALSE Explanation: Japanese managers do place great emphasis on consensus, but they tend to use informal, rather than formal, communication to arrive at consensus.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management

30) The purpose of feedback is to ensure that a message was received and understood.

Answer: TRUE Explanation: The key to feedback is understanding. If the receiver of the message can demonstrate that he or she understood the message, then the sender knows that the communication was successful.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 31) Active listening requires making super-quick judgments immediately after a person begins speaking.

Answer: FALSE Explanation: The opposite is true—active listening involves reserving judgment until the person has been able to convey the entire message.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 32) Nonverbal communication is an important part of active listening.

Answer: TRUE Explanation: A major part of active listening is to show appropriate eye contact, facial expressions, and body language to communicate that the message is being heard and understood.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 33) An active listener should never interrupt the speaker by asking questions.

Answer: FALSE Explanation: Though interruptions should be avoided, asking appropriate questions can clarify and enhance the understanding of a message. Therefore, asking questions is an important part of active listening.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

34) The average person can take in information at a much faster rate than is communicated through speech.

Answer: TRUE Explanation: The average person can comprehend about 400 words per minute compared to speech that runs at 200 words per minute or less, meaning that listening is faster than speaking.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 35) A good rule of thumb is never to try to communicate an important message until your emotions are under control.

Answer: TRUE Explanation: Emotions can distort both incoming and outgoing communication.

Since emotional events typically are brief, allowing them to blow over before attempting to communicate is a good policy to follow.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 36) A drawback to instant messaging is that it creates security problems.

Answer: TRUE Explanation: Having multiple users all logged onto a system at once—which is required for instant messaging—can create security breaches in a system.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 37) Companies save money without suffering any negative consequences by using email to replace large face-to-face meetings.

Answer: FALSE Explanation: Videoconferencing and teleconferencing, rather than email, are used to replace face-to-face meetings.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

38) Most shorthand abbreviation messages originate in the "culture" of text messaging.

Answer: TRUE Explanation: The cumbersome process of typing text messages has given rise to a number of popular abbreviations, such as BTW for "by the way."

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 39) Members of a company sharing efficient shortcuts in a complex computer software program is an example of knowledge management.

Answer: TRUE Explanation: Knowledge management involves sharing things that people in an organization learn. When knowledge is managed, if one part of the organization works out the process for solving a problem, other parts of the organization can use that information to their advantage rather than having to "reinvent the wheel."

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 40) Electronic communication is not admissible in court, so employees don't need to worry about what they say online.

Answer: FALSE Explanation: Electronic communication is admissible in court.

Diff: 2 AACSB: Use of information technology Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 41) The manager has control over all three components of customer service interactions.

Answer: FALSE Explanation: The first component, the customer, cannot be controlled by the manager.

Diff: 2 AACSB: Communication abilities Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

42) For managers, communication can't be overemphasized because ________ requires communication.

A) decision making B) planning C) supervising and monitoring employees D) everything a manager does Answer: D Explanation: D) Communication is required not just for decision making, planning, and monitoring employees but for virtually every activity that a typical manager carries out, making "everything a manager does" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 43) The communication process begins with this.

A) a receiver B) a message C) a thought or purpose D) an encoded message Answer: C Explanation: C) The communication process begins with a thought or idea that the sender wants to communicate to someone else, making "a thought or purpose" the correct response. The message doesn't exist until after the thought is encoded, ruling out "a message" and "an encoded message" as the correct response because they come later in the process. The receiver also comes later in the process, after the message is decoded, ruling out "a receiver" as a correct answer.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

44) In order to transmit a message, the thought originating with the sender must be ________ to symbolic form.

A) decoded B) encoded C) deciphered D) expanded Answer: B Explanation: B) A thought must be translated, or encoded, to some kind of symbol language before it can be communicated, making "encoded" the correct response.

Symbol languages include writing, verbal speech, sign language, etc. Decoding, which is fairly synonymous with deciphering, is done after the message is sent by the receiver, so "decoded" and "deciphered" are incorrect responses. Encoding is a form of translation, not expansion, so "expanded" is not correct.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 45) Which communication sequence is correct?

A) sender → decoding → channel → encoding → receiver B) sender → channel → medium → decoding → receiver C) source → sender → encoding → decoding → receiver D) sender → encoding → channel → decoding → receiver Answer: D Explanation: D) The choice indicating encoding as the second step is the only correct sequence, showing how a sender encodes a thought into a message that is sent through a channel only to be decoded and finally understood by a receiver. The choice with decoding as the second step is incorrect because it confuses decoding and encoding.

The choice with channel as the second step is wrong because it leaves out encoding.

The choice with source as the first step is wrong because it omits the channel.

Diff: 2 AACSB: Analytic thinking Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

46) Reading is an example of this communication step.

A) feedback B) encoding C) sending D) decoding Answer: D Explanation: D) Reading is a form of decoding, or interpreting symbols, making "decoding" the correct response. A form of encoding is writing, not reading. Sending a written message occurs when, for example, a written letter is mailed. Feedback occurs after the message has been decoded and understood.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 47) Four conditions influence the content of an encoded message: the skills, attitudes, knowledge, and ________ of the sender.

A) social-cultural system B) environmental conditions C) volume D) political conditions Answer: A Explanation: A) Of the choices listed, only the social-cultural system is a recognized factor that affects the content and quality of an encoded message, so that choice is the correct response. The social-cultural system includes a sender's beliefs and values.

Beliefs and values invariably have a strong influence over what the sender chooses to communicate and how the message is presented. Together, the social-cultural system and the sender's knowledge, attitudes, and communication skills determine the content and effectiveness of any message.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

48) A ________ is the actual physical product encoded by the source.

A) channel B) message C) thought D) source Answer: B Explanation: B) The actual physical product that gets encoded by a sender is called the message, making "message" the correct response. The thought is the original idea that gets encoded into a message. The source is the person who encodes the thought into a message. The channel is the path that the message takes to reach the receiver.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 49) The channel is the ________.

A) actual physical product from the source that conveys a purpose B) person who receives the message C) medium that the messages travels through D) person who sends the message Answer: C Explanation: C) The channel is the path that the message takes to reach the receiver, making "medium" the correct response. The actual physical product that gets encoded by a sender is called the message. The receiver is the person who receives and decodes the message. The sender is the person who creates the message.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 50) A spelling mistake in a message is an example of ________.

A) an encoding error B) a decoding error C) a transmission error D) a receiver error Answer: A Explanation: A) Making a spelling mistake clearly would occur during the encoding process when a thought was being translated into symbols, making "an encoding error" the correct response. An error in selecting the proper symbols would clearly occur well before decoding, transmitting, or receiving the message, so all of those choices can be ruled out.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 51) The final link in the communication process is ________.

A) encoding B) decoding C) channeling D) feedback Answer: D Explanation: D) Feedback is the process of verifying the message that was sent to confirm that it was received and understood correctly, making "feedback" the correct response. Encoding and decoding occur earlier in the sequence, so they are incorrect responses. A channel refers to the medium through which a message is transmitted, so it is not the final step in the communication process.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 52) Feedback is a message that travels from ________.

A) encoder to receiver B) source to decoder C) the original receiver to the original sender D) the original sender to the original receiver Answer: C Explanation: C) A feedback message is sent from the original receiver back to the original sender, making that choice the correct response. The other three choices all involve the original sender sending a message to the original receiver, so they are incorrect responses.

Diff: 3 AACSB: Analytic thinking Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

53) Skills, attitudes, knowledge, and social cultural systems affect ________.

A) the sender only B) the receiver only C) neither the sender nor the receiver D) both the sender and the receiver Answer: D Explanation: D) The four components that affect the content and quality of the message sent by the sender—skills, attitudes, knowledge, and social cultural systems —also affect how the message is interpreted by the receiver, making "both the sender and the receiver" the correct response and ruling out all other choices. For example, the writing skill of the sender may affect the composing of a message, while the reading and interpreting skill of the receiver affects the understanding of the message.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 54) The great advantage of a written message is that it ________.

A) is informal B) is easy to provide feedback for C) is unambiguous D) provides a permanent record Answer: D Explanation: D) Written messages are no more unambiguous than spoken messages —in fact, since they lack nonverbal cues, written messages are probably more ambiguous than verbal messages, making "unambiguous" an incorrect response.

Similarly, written messages are typically less informal and harder to provide feedback for than spoken messages, making "informal" and "easy to provide feedback for" incorrect responses. Where written messages clearly are advantageous is in providing a tangible, permanent record that can be referred to later on, making "provides a permanent record" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

55) Which of the following is a disadvantage of written communication?

A) vague B) time-consuming C) not permanent D) hard to store Answer: B Explanation: B) Written messages are easier to store, more specific, and more permanent than oral messages, making these choices incorrect. The disadvantage of written messages is that they are harder and more time-consuming to compose than oral messages, making "time-consuming" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 56) Along the grapevine, ________.

A) good news travels fastest B) bad news travels slowly C) good news travels slowest D) bad news travels fastest Answer: D Explanation: D) Through an informal grapevine, bad information about an individual or organization travels faster than good information, making "bad news travels fastest" the correct response and ruling out all other responses. The reason for this is probably that bad information tends to be more shocking, salacious, or exciting than good news, so people tend to be more motivated to pass it along than less exciting information.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

57) You would expect to find a grapevine with the most accurate rumors in ________ organization.

A) an organic B) a mechanistic C) a hierarchical D) an authoritative Answer: A Explanation: A) Open, nonrigid, organic-style organizations tend to have the most accurate grapevine information, making "organic" the correct response. Rigid, hierarchical, nonopen, mechanistic, authoritative organizations tend to have grapevines that provide less accurate information.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 58) An example of nonverbal communication is ________.

A) an email B) a smile C) a whisper D) a voice mail Answer: B Explanation: B) Nonverbal communication is any form of communication that does not involve words. An email features written words, a whisper features softly spoken words, and a voice mail features recorded words—making each choice verbal rather than nonverbal communication. A smile is nonverbal because it communicates information in a wordless manner.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

59) Verbal intonation is a form of ________.

A) verbal communication B) body language C) nonverbal communication D) facial expression Answer: C Explanation: C) Though it involves words, verbal intonation is a form of nonverbal communication because it involves how the words are pronounced, rather than the explicit meanings of the words themselves, making "nonverbal communication" the correct response and ruling out "verbal communication." Verbal intonation is not a form of body language or facial expression because it involves changes in pitch, volume, and articulation of words, not body or face movements.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 60) A live singing performance allows the audience to perceive ________ forms of communication.

A) verbal, body language, and verbal intonation as B) only verbal C) only nonverbal D) body language, facial expressions, and verbal intonation as Answer: A Explanation: A) Seeing a singer perform live allows the audience to hear the words in a song (verbal communication), the body movements and facial expressions of the singer (body language), and the way the singer phrases and articulates the song (verbal intonation), making the choice encompassing all three the correct response.

All other choices leave out at least one form of communication, so they are not correct responses for this question.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

61) Listening to a singing performance on the radio allows a listener to perceive ________ forms of communication.

A) verbal, body language, and verbal intonation as B) only verbal C) only nonverbal D) both verbal and nonverbal Answer: D Explanation: D) Listening to a singer perform on the radio allows the audience to hear the words in a song (verbal communication) and the way the singer phrases the song (verbal intonation, a form of nonverbal communication), making "both verbal and nonverbal" the correct response. The choice indicating verbal, body language, and verbal intonation is incorrect because it includes body language, something that is not perceived with a radio. "Only verbal" is incorrect because though the radio projects sound waves only, it is possible to hear verbal intonation, a nonverbal form of communication in a recorded song, so a radio listener can perceive both verbal and nonverbal communication. "Only nonverbal" is wrong because words are clearly heard in a song played on a radio.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 62) Watching a movie in a foreign language you don't understand without subtitles allows you to perceive ________ forms of communication.

A) verbal, body language, and verbal intonation as B) only verbal C) only nonverbal D) both verbal and nonverbal Answer: C Explanation: C) A foreign language movie gives the viewer access to nonverbal forms of communication only—gestures, movements, facial expressions, intonations —without any verbal communication taking place, making "only nonverbal" the correct response. The choice indicating verbal, body language, and verbal intonation is incorrect because it includes spoken language, something that is not perceived in a foreign movie. "Only verbal" is incorrect because the spoken communication is exactly what the viewer misses in a foreign language movie. "Both verbal and nonverbal" is wrong because it includes verbal communication.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

63) Reading a movie script allows you to perceive ________ forms of communication.

A) verbal, body language, and verbal intonation as B) only verbal C) only nonverbal D) both verbal and nonverbal Answer: B Explanation: B) Reading a script gives the reader access to words only (verbal communication), making "only verbal" the correct response. The choice indicating verbal, body language, and verbal intonation is incorrect because it includes body language and intonation, things that can only be imagined, but not actually perceived, on the written page. "Only nonverbal" is incorrect because all nonverbal communication is missing from a movie script, except as descriptions. "Both verbal and nonverbal" is incorrect because it includes nonverbal communication.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 64) This is the PRIMARY reason for why managers often travel long distances to have a face-to-face meeting with someone.

A) It shows respect.

B) Most communication is done through body language.

C) Other forms of communication have security concerns.

D) It communicates a sense of power, rank, and mobility.

Answer: B Explanation: B) Though face-to-face meetings may be a way to show respect and communicate a sense of power, the primary reason managers take the trouble to meet in person is to be able to see the body language of the person they are meeting, making "communication is done through body language" the correct response. Studies show that 65 to 90 percent of all communication is accomplished through nonverbal means, meaning that if a manager misses out on nonverbal communication, a lot is missed. Security may also be an extremely minor factor here, but it does not compare to the importance of nonverbal communication.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

65) ________ is the deliberate manipulation of information by the sender to make it appear more favorable to the receiver.

A) Selective perception B) Information overload C) Jargon D) Filtering Answer: D Explanation: D) The manipulation of information by the sender through careful editing and choosing of facts to make a position seem more favorable to a receiver is called filtering, making this the correct response. Selective perception is the editing of information by the receiver, not the sender. Information overload blocks communication by making receivers too overwhelmed by information to pay attention to messages that are actually important. Jargon is "in-group" language that can be troublesome to people who are outside the group.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 66) All of the following are barriers to effective interpersonal communication EXCEPT ________.

A) filtering B) selective perception C) feedback D) language Answer: C Explanation: C) Filtering (the manipulation of information by the sender to make a position seem more favorable), selective perception (the selective editing of information by the receiver), and language that can mean different things to different people are all communication barriers. Feedback (the process of verifying a sent message), on the other hand, promotes, rather than blocks, effective communication, making "feedback" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

67) When an auto industry manager raves about plans for a new car design and fails to see the flaws in the model, he is engaging in this.

A) selective perception B) filtering C) emotion D) information overload Answer: A Explanation: A) Filtering involves manipulation of information by the sender to make a situation seem more favorable, while selective perception involves similar cherrypicking of facts, but by the receiver of the information, not the sender. In this case, as the receiver of information (the design plans), the manager is engaging in selective perception, making this the correct response. Information overload blocks communication by making receivers too overwhelmed by information to pay attention to messages that are actually important. Emotion blocks information when strong feelings distort the perceptions of the receiver.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 68) When an auto designer's presentation of a new design shows all of the good features of the design but fails to mention the poor gas mileage that the model will get, she is engaging in this.

A) emotion B) selective perception C) information overload D) filtering Answer: D Explanation: D) Filtering involves manipulation of information by the sender to make a situation seem more favorable, while selective perception involves similar cherrypicking of facts, but by the receiver of the information, not the sender. In this case, the designer is the sender of information (the presentation), so she is engaging in filtering, making "filtering" the correct response. Information overload blocks communication by making receivers too overwhelmed by information to pay attention to messages that are actually important. Emotion blocks information when strong feelings distort the perceptions of the receiver.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Discuss the role of ethics and social responsibility in management

69) Auto company engineers want technical terms such as limited slip differential used in car ads. Ad execs, on the other hand, don't want these terms used. The cause of their disagreement is ________.

A) emotion B) selective perception C) language D) gender Answer: C Explanation: C) Language can be a barrier when different words and phrases mean different things to different audiences. In this case, it is likely the engineers think the technical terms add meaning to the ads, while the ad people think that they are intimidating and confusing. All of this points to the idea that language is the communication barrier here—the same words mean different things to different people—making "language" the correct response. Emotion blocks information when strong feelings distort the perceptions of the receiver. Selective perception is the biased perception of facts on the part of a receiver. Gender distorts communication when males and females fail to appreciate each other's point of view.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 70) When an auto executive who is upset because his teenage son got suspended from school ends up nixing new design plans for no apparent reason, communication has been distorted by this.

A) selective perception B) emotion C) filtering D) gender Answer: B Explanation: B) Emotion blocks information by distorting the perceptions of the receiver. The executive is upset, so emotions are probably distorting his perceptions and decisions—rather than filtering (the manipulation of information by the sender to make a situation seem more favorable), selective perception (biased perception of facts on the part of a receiver), or gender, which distorts communication when males and females fail to appreciate each other's point of view. This makes "emotion" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

71) When an auto executive fails to notice an important demographics report in her overstuffed inbox before going to a meeting, she is likely to be suffering from this.

A) information overload B) emotion C) filtering D) gender Answer: A Explanation: A) Information overload blocks communication by making receivers too overwhelmed by information to pay attention to messages that are actually important.

This is what is occurring in this situation, making "information overload" the correct response. Filtering involves manipulation of information by the sender to make a situation seem more favorable. Emotion blocks information by having passions and strong feelings distort the perceptions of the receiver. Gender distorts communication when males and females fail to appreciate each other's point of view.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 72) Jargon can be very useful for communication ________.

A) within a specialized, close-knit group B) between people who speak different languages C) outside of a specialized, close-knit group D) between males and females Answer: A Explanation: A) Jargon can be useful as shorthand for technical and hard-to-describe terms within a small, specialized, close-knit group, making this the correct response.

Where jargon runs into trouble is when people use jargon terms with outsiders who aren't familiar with what the terms stand for, making both outsiders and people who speak different languages incorrect responses. The use of jargon would have little or no impact on how well males and females understand one another.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

73) Filtering tends to be more prevalent in this kind of organization.

A) organic B) highly vertical C) highly horizontal D) nonmechanistic Answer: B Explanation: B) The opportunity for filtering occurs when one level of an organization has access to information that another level doesn't have. Therefore, the more vertical levels an organization has, the more filtering is likely to take place, making "highly vertical" the correct response. Organic, very horizontal, and nonmechanistic organizations are all nonvertical, so these choices can be eliminated as possible correct responses.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 74) Jargon tends to cause problems when it is used ________.

A) within a specialized, close-knit group B) as shorthand for technical terms C) outside of a specialized, close-knit group D) in spoken rather than written language Answer: C Explanation: C) Jargon can be useful as shorthand for technical and hard-to-describe terms within a small group. Where jargon causes confusion is when people within the group use jargon terms with outsiders who aren't familiar with what the terms stand for, making "outside of a specialized, close-knit group" the correct response. Whether or not jargon is spoken or written has little or no impact on how well it is understood.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 75) The difference between male and female styles of communication exists ________.

A) in every culture B) only in the United States C) only in western cultures D) only in Asian cultures Answer: A Explanation: A) Men and women have different communication styles. This difference cuts across all cultures, languages, and ethnic identities.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

76) U.S. managers tend to rely on this style of communication.

A) formal and written B) informal and unwritten C) verbal and informal D) verbal and formal Answer: A Explanation: A) The culture of American society tends to value status and individual achievement above consensus and collective achievement, causing U.S. managers to try to distinguish themselves by issuing a lot of written formal documents that can be used to document and verify their achievement. This makes "formal and written" the correct response and rules out all other choices.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 77) Japanese managers tend to rely on this style of communication.

A) formal and written B) formal and unwritten C) informal and verbal D) verbal and formal Answer: C Explanation: C) The culture of Japanese society tends to value consensus and collective achievement above individual achievement and status, causing Japanese managers to try to conduct personal consultations with others to arrive at consensus before taking definite action. This makes "informal and verbal" the correct response and rules out all other choices.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management

78) The purpose of feedback is to determine whether a message was ________.

A) received B) received and understood C) worth sending D) verbal or nonverbal Answer: B Explanation: B) Feedback is a check on whether a message was both received and understood in the manner in which the sender intended. Since received messages can be misinterpreted, confirming simply that a message was received is not enough in most cases. Feedback is concerned only with the reception and correct interpretation of a message, not with whether the message was worth sending or verbal, making both of these responses incorrect.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 79) Feedback ________.

A) can be spoken, nonverbal, or written B) must be spoken C) must be written D) can be spoken, verbal, or oral Answer: A Explanation: A) Feedback can take on almost any form. A nod of the head can be a form of feedback. So can a written email or note, as well as a detailed oral response to a communication. Together, these factors make "spoken, nonverbal, or written" the correct response and rule out the other three choices as too limited.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

80) One particularly effective form of providing feedback is for the receiver to ________.

A) raise a hand to show that the message was received B) state "message received" out loud C) restate the message in his or her own words D) send a written message that states "message received" Answer: C Explanation: C) The three incorrect choices all indicate only that the message was received and fail to show that the message was actually understood. Only by restating the message in his or her own words can the receiver clearly indicate that the message was fully understood, so "restate the message" is the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 81) Simplifying language is most important when ________.

A) the speaker has little time B) the audience is sympathetic C) the audience is unfamiliar D) the message is simple Answer: C Explanation: C) Simplifying language is most important when the audience may be unfamiliar with the material the speaker is presenting and the terms and concepts that the speaker is using, making "the audience is unfamiliar" the correct response. Having a simple message, a sympathetic audience, or little time to speak are not specific reasons for why language should be toned down, while lack of familiarity is.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

82) The average listener can understand language at a rate that is ________ the average speaker can speak.

A) much slower than B) much faster than C) the same rate that D) a little bit slower than Answer: B Explanation: B) The typical speaker speaks at a rate of 200 words per minute or less.

The typical listener can comprehend language at rates of up to 400 words per minute.

This mismatch makes listeners' attention wander at times, since their listening rate is much faster than the speech they hear. These factors make "faster" the correct response and rule out all other responses.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 83) Because the average listener can comprehend language at a rate that is much higher than speakers can speak, people tend to be ________.

A) poor listeners B) good speakers C) slow talkers D) good listeners Answer: A Explanation: A) The mismatch between the ability of humans to listen and speak causes listeners, who function at a higher rate, to lose focus when they are listening.

This loss of focus is a major reason why many people tend to be poor listeners, making this the correct response. It may also incidentally be a reason why many people tend to talk fast—to try to make up for the speaking-listening mismatch.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

84) This is the primary goal of active listening.

A) developing empathy with the speaker B) avoiding premature judgments or interpretations of the speaker's message C) focusing on the speaker D) understanding the full meaning of the speaker's message Answer: D Explanation: D) While developing empathy, avoiding premature judgments, and focusing are all goals of active listening, the main goal is to understand the meaning of the speaker's words in totality, making this the correct response.

Diff: 1 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 85) Active listening is enhanced by developing ________ with the speaker.

A) apathy B) sympathy C) a personal friendship D) empathy Answer: D Explanation: D) Developing sympathy (actively liking the speaker) or a personal friendship with the speaker might indeed improve listening, but both options are too impractical for improving everyday listening. Rather than befriend or actively sympathize with the speaker, the listener simply needs to empathize, or identify with the speaker's point of view and situation, to have a good chance of fully understanding the speaker's message, making "empathy" the correct response. Note that apathy, or not caring about the speaker, is the opposite of what an active listener should do.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

86) Which action best shows a speaker that you are paying close attention?

A) avoiding interruptions of the speaker B) avoiding overtalking C) direct eye contact D) smooth transitioning from listener to speaker Answer: C Explanation: C) While avoiding interruptions, overtalking, and making smooth listener-to-speaker transitions are all important for active listening, they don't specifically show that a listener is paying close attention. Direct eye contact, on the other hand, indicates that the listener is focused and not distracted, making this choice the correct response for this question.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 87) Which of the following is NOT true of active listening?

A) It is a skill that most people need to improve.

B) Listening demands serious intellectual effort.

C) Active listening demands intense concentration.

D) Empathy is a barrier to active listening.

Answer: D Explanation: D) Active listening definitely requires intense concentration and serious effort, so those choices can be eliminated as correct responses. Since most people are poor listeners, active listening is clearly a skill that most people need to improve, ruling out this choice as a correct response. The only choice that is not true of active listening is that empathy prevents it—in fact, empathy is a key element of active listening, making "empathy is a barrier" the correct response.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

88) Emotions can distort communication ________.

A) for senders only B) for receivers only C) for both senders and receivers D) only when negative Answer: C Explanation: C) Whether they are positive or negative, emotions can distort communication on both ends—for both senders and receivers, making this the correct response and ruling out all other responses. Receivers let emotions distort communication when they allow feelings to color their perception of a message.

Senders let emotions distort when they fire off a message in the heat of the moment without allowing the situation to cool down.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 89) During an interview minutes after a tough loss, a soccer coach who is frustrated with calls made by the game's referees should probably do this.

A) blame himself for the defeat B) blame the referees for the defeat C) express his anger freely D) take some time to cool down Answer: D Explanation: D) Rather than express anger and blame himself or the referees for the loss, the coach should take time to cool down. Emotions are transient events that tend to subside with time. Saying too much in the heat of battle is allowing emotions to distort communication, so it should be avoided.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

90) A manager who is trying to sound conciliatory should make sure that ________.

A) her voice is soft B) she smiles when she speaks C) her voice shows no anger D) her voice shows no emotion Answer: C Explanation: C) Trying to sound conciliatory requires a speaker to control her emotions in every way. A soft voice and a smile may help, but not as much as making sure that she displays no anger or resentment, making "shows no anger" the correct response. Showing no emotion at all is a mistake because it is likely to seem unnatural and to suggest that the speaker is trying to hide something.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 91) Networked communication capabilities include all of the following EXCEPT ________.

A) email B) the grapevine C) instant messaging D) electronic data interchange Answer: B Explanation: B) A networked communication capability links computers to an organization network—something that email, instant messaging, and EDI accomplish.

The grapevine is not part of a computer system, so it is the correct response.

Diff: 2 AACSB: Use of information technology Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

92) Techniques organizations utilize to exchange standard business transaction documents, such as invoices or purchase orders, are called ________.

A) intranets B) extranets C) electronic data interchange D) teleconference Answer: C Explanation: C) An electronic data interchange allows computer systems between different companies to exchange data directly via dedicated lines, making "electronic data interchange" the correct response. An intranet is a cordoned off section of the Internet that is made available only to an organization. An extranet is similar to an intranet in that it sections off a part of the Internet for exclusive use by an organization. An extranet allows selected outsiders to access this limited system. A teleconference is a meeting held over telephone lines.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 93) Ross can create web pages that are accessible only to members of his organization on ________.

A) an intranet B) an extranet C) an electronic data interchange D) a videoconference Answer: A Explanation: A) Ross is using an intranet—a cordoned off section of the Internet that is made available only to an organization—making "intranet" the correct response. An extranet is similar to an intranet in that it sections off a part of the Internet for exclusive use by an organization, but an extranet allows selected outsiders to access this limited system as well. An electronic data interchange allows computer systems between different companies to exchange data directly via dedicated lines. A videoconference is a meeting held that uses video cameras to allow attendees to see as well as speak to one another.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

94) Which kind of electronic meeting format allows participants to view nonverbal forms of communication that include facial expressions and body language?

A) teleconferencing B) videoconferencing C) electronic data interchange D) face-to-face meeting Answer: B Explanation: B) Teleconferencing is done over telephone lines (or by email), so it doesn't include a visual dimension in which body language can be viewed. Electronic data exchange is strictly a data medium and does not involve human communication.

A face-to-face meeting is a live, not an electronic, meeting, so it can't be a correct answer for this question. A videoconference has both a sound and a visual dimension, allowing participants to speak and view one another, so "videoconferencing" is the correct response.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 95) Which kind of electronic meeting format allows participants access to verbal communication that includes voice intonation but no body language?

A) teleconferencing B) videoconferencing C) electronic data interchange D) face-to-face meeting Answer: A Explanation: A) Teleconferencing is done over telephone lines, so it allows participants to speak and hear each other's voice intonations but not to have access to other forms of nonverbal communication, making "teleconferencing" the correct response. A videoconference and a face-to-face meeting both have a visual dimension, allowing participants to access all forms of nonverbal communication, not just voice intonation. Electronic data exchange is strictly a data medium and does not involve human communication.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

96) An extranet is different from an intranet in that it ________.

A) allows participants to use the Internet B) does not involve the Internet C) is faster than an intranet D) allows outside companies to participate Answer: D Explanation: D) Both an intranet and an extranet are sectioned off areas of the Internet that are accessible only to the organization that creates them. The difference between the two is that an intranet is strictly for in-house use while an extranet can include outside users, such as vendors and customers of the company. This makes "allows outside companies to participate" the correct response and rules out "allows participants to use the Internet" because both systems can access the Internet and "does not involve the Internet" because it is not true. An extranet and intranet typically run at the same speed, so "is faster than an intranet" is incorrect.

Diff: 1 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 97) Terms such as BIL, NSFW, and FYEO are examples of which of the following?

A) text-messaging shorthand B) Internet agencies C) government education programs D) workplace compensation bureaus Answer: A Explanation: A) These terms are text-messaging shorthand for "boss is listening" (BIL), "not safe for work" (NSFW), and "for your eyes only" (FYEO), making "textmessaging shorthand" the correct response. These terms were created to save time, keystrokes, and effort and are especially useful when text space is limited, as it is on sites like Twitter.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

98) Two main communication challenges of using company internet systems are legal issues and ________.

A) bandwidth limitations B) lack of personal interaction C) poor grammar D) inability to handle visual impaired customers Answer: B Explanation: B) It may be called social media, but another communication challenge posed by the Internet age we live and work in is the lack of personal interaction. Even when two people are communicating face-to-face, understanding is not always achieved. However, it can be especially challenging to achieve understanding and collaborate on getting work done when communication takes place in a virtual environment.

Diff: 2 Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 99) A survey on email and content security found that ________ of companies saw their businesses affected by the exposure of sensitive information.

A) less than 5 percent B) almost 10 percent C) one quarter D) one half Answer: C Explanation: C) The correct answer is that 26 percent of companies surveyed saw their businesses affected by the exposure of sensitive or embarrassing information.

Managers need to ensure that confidential information is kept confidential. Employee emails and blogs should not communicate—inadvertently or purposely—proprietary information.

Diff: 2 Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

100) With regard to social networks, many companies are now A) encouraging employees to use social networks as a tool to work collaboratively.

B) discouraging younger employees from using company in-house networks for customer networking.

C) encouraging younger employees to seek counseling for social network addiction.

D) discouraging older employees to make social connections on social networks Answer: A Explanation: A) Instead of fighting the rise of social networks, some companies are encouraging employees to utilize the power of social networks to collaborate on work and to build strong connections. This trend is especially appealing to younger workers who are comfortable with this communication medium.

Diff: 2 Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 101) A group of bloggers who share information on the latest advances in computer aided graphics would be an example of this.

A) knowledge circle B) self-managed team C) virtual team D) communities of practice Answer: D Explanation: D) Groups that meet through blogs or social networks who share a concern, a problem, or a passion about a topic are called communities of practice.

Diff: 2 AACSB: Communication abilities Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 102) A group of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in that area by interacting on an ongoing basis are called ________.

A) virtual team B) communities of practice C) communities of knowledge D) blogosphere Answer: B Explanation: B) Groups that meet through blogs or social networks who share a concern, a problem, or a passion about a topic are called communities of practice.

Diff: 1 Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

103) Organizations with this type of culture place an emphasis on meeting the needs of customers.

A) service B) production C) innovative D) adaptive Answer: A Explanation: A) An organization with a strong service culture already values taking care of customers—finding out what their needs are, meeting those needs, and following up to make sure that their needs were met satisfactorily. Each of these activities involves communication, whether face-to-face, by phone or email, or through other channels.

Diff: 2 Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 104) Which of the following tools, thought to be outdated, is still an effective means of gather employee input?

A) customer comment cards B) suggestion box C) performance appraisals D) town hall meetings Answer: B Explanation: B) Suggestion boxes are still a viable means of collecting employee input. Businesspeople frequently joked about the suggestion box and cartoonists lambasted the futility of putting ideas in the employee suggestion box. Unfortunately, this attitude about suggestion boxes still persists in many organizations, but it shouldn't.

Diff: 1 Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 105) What should a speaker do if her listener's feedback summary of her message is incorrect?

A) The speaker should repeat the original message word for word.

B) The speaker should summarize the summary.

C) The speaker should summarize the original message.

D) The speaker should rephrase the message.

Answer: D Explanation: D) An incorrect summary indicates that the speaker has failed to understand the message. Therefore, the only useful response is to repeat the message, but the repetition should be done in a new way to clarify what appeared to be misunderstood in the original message.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

106) A listener's summary of a speaker's words shows that the listener did not correctly understand the message. Which of the following must be true?

A) The speaker used clear, simplified language.

B) The listener failed to use active listening.

C) The speaker failed to send a clear message, the listener failed to receive the message properly, or both the speaker and listener failed to communicate properly.

D) The speaker sent a clear message, but the listener failed to receive the message properly due to poor listening, jumping to conclusions, or relying on preconceived notions about the speaker.

Answer: C Explanation: C) If the message didn't get conveyed accurately, either the speaker or the listener failed somehow. All of the other choices are clearly possible but not necessarily true. The only choice that must be true is that there was a communication failure on the part of either the speaker, the listener, or both the speaker and listener.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 107) A listener's summary of a speaker's words shows that the listener correctly understood the speaker's message. Which of the following must be true?

A) The speaker used clear, simplified language.

B) The listener used active listening.

C) The speaker sent a clear message and the listener successfully received the message.

D) Either the speaker sent a clear message or the listener was able to interpret an unclear message successfully despite its lack of clarity.

Answer: D Explanation: D) If the message got conveyed accurately, either the speaker or the listener was somehow successful in the communication process. One option has the speaker accurately conveying his or her message. Another option involves the listener inferring an unclear message. Both options are also possible—that both speaker and listener did their jobs well—but not necessarily true.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

108) When is it acceptable for a speaker to use language that is not simplified?

A) when both the listener and speaker have the same language as their native tongue B) when the listener showed no problem in understanding previous messages of similar complexity C) when both the listener and speaker speak English but English is not the first language of either of them D) when both the listener and speaker speak the different languages Answer: B Explanation: B) If the speaker is being understood successfully, there is no reason for the speaker to simplify his or her language. Language should be simplified only when misunderstanding is taking place.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 109) When is it strongly recommended that a speaker use language that is highly simplified?

A) when both the listener and speaker speak the same language B) when both the listener and speaker speak different languages C) when both the listener and speaker speak English D) when both the listener and speaker speak a language other than English Answer: B Explanation: B) When both speaker and listener speak different languages as a first language, it is a good idea to keep communication simple and to use language that is uncomplicated and direct. When both speaker and listener speak the same native language, more complex language can be used.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

110) Who should never use jargon?

A) a judge telling a witness how to testify B) a surgeon giving orders to her staff C) a plumber ordering parts from a supply store D) a coach telling a quarterback what play to use Answer: A Explanation: A) Jargon is acceptable among individuals who are familiar with the same system. Thus, surgeons and staff, plumbers and parts clerks, and coaches and quarterbacks operate within the same system so they can indulge in jargon. A judge communicating with a witness who is not part of the legal system should avoid jargon and stick to clear, direct, simple language.

Diff: 2 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 111) A supervisor jokingly tells a colleague, "You're fired!" in an email. What risk does the supervisor run?

A) Without verbal cues, the message may be taken seriously.

B) Without nonverbal cues, the message may sound ridiculous rather than funny.

C) Without nonverbal cues, the colleague may not believe him.

D) Without nonverbal cues, the message may be taken seriously.

Answer: D Explanation: D) Emails always run the risk of being interpreted incorrectly. A message delivered orally includes nonverbal cues to make it clear that the remark is a joke. Without those nonverbal cues, the recipient may not recognize the message as a joke.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 112) What kind of process is listening?

A) effortless B) emotional C) passive D) active Answer: D Explanation: D) Too many people think that they can sit back and totally relax when they are listening to a speaker. In fact, listening is an active process that involves concentration and effort on the part of the listener as well as the speaker.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 113) When would be the best time to deliver "bad news" to your boss?

A) when you also have good news to deliver B) on a day when the boss is not busy and can concentrate on how to respond to the news C) when you have no good news to deliver D) on a day when the boss is very busy and has no time to concentrate on how to respond to the news Answer: A Explanation: A) Emotion can strongly affect how a message is received. Being able to balance bad news with good news can make an enormous difference in how news is received. A good strategy might be to deliver the good news first to put the boss in a positive frame of mind, then deliver the bad news.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 114) Which of the following accounts for people's minds wandering while they listen to a speaker?

A) Listeners listen at a slower rate than speakers speak.

B) Listeners listen at the same rate that speakers speak.

C) Listeners listen at a faster rate than speakers speak.

D) Listeners adjust their listening rate to the speaker's rate.

Answer: C Explanation: C) The average person can comprehend spoken language at a much higher rate than a speaker can speak words. That disparity results in the listener getting "ahead" of the speaker while waiting for the words to be communicated, which in turn results in "wandering."

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

115) To bridge the gap between speaking and listening, how would speakers need to change their speaking rate?

A) Speakers would need to increase their speaking rate by a factor of 5 to increase their speaking rate from about 80 words per minute to about 400 words per minute.

B) Speakers would need to increase their speaking rate by a factor of 2 to 3 to increase their speaking rate from about 125 to 200 words per minute to about 400 words per minute.

C) Speakers would need to decrease their speaking rate by a factor of 2 to decrease their speaking rate from about 400 words per minute to about 200 words per minute.

D) Speakers would not need to increase their speaking at all. Instead, listeners would need to double their listening rate to catch up with speakers.

Answer: B Explanation: B) With speaking rates ranging from 125 to 200 words per minute, to catch up with a listening rate of 400 words per minute, speakers would need to increase their rate by a factor of 2 to 3.

Diff: 2 AACSB: Analytic thinking Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 116) How does empathy improve the communication process?

A) Empathy helps the speaker focus on what the listener would like to hear.

B) Empathy helps the listener focus on the speaker's actual words.

C) Empathy helps the listener get rid of preconceived notions of what the speaker is trying to say.

D) Empathy helps the speaker get rid of preconceived notions of what the listener is trying to hear.

Answer: C Explanation: C) Empathy puts the listener in the speaker's "shoes," allowing the listener to hear the speaker's words from the speaker's own perspective. This ability to experience the speaker's point of view helps the listener to judge the speaker's words on their own merit and to avoid jumping to conclusions or relying on preconceived ideas of what the speaker is likely to say.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

117) How does jumping to conclusions affect the communication process?

A) Jumping to a conclusion causes the speaker to stop speaking because he or she sees no reason to carry on to a listener who already knows what is being said.

B) Jumping to a conclusion causes the listener to stop listening because he or she has already formed a view of what the speaker is attempting to express.

C) Jumping to a conclusion causes the listener to feel shortchanged because he or she is not hearing the entire message.

D) Jumping to a conclusion causes the speaker to feel nervous because he or she feels obligated to expand on his or her basic message.

Answer: B Explanation: B) Jumping to conclusions short circuits the communication process.

The listener feels that he or she knows what the speaker is trying to express. Thus, instead of listening, the listener tunes out and, in the process, often misses the actual message that the speaker is trying to express.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 118) Which of the following best explains why it is a good idea for a person to cool down before sending off an angry message?

A) Emotions are permanent. People never change their view of a situation after their emotion fades.

B) Emotions are long-lived. People often change their view of a situation after their emotion changes.

C) Emotions are short-lived. People often change their view of a situation after their emotion has time to cool.

D) Emotions are short-lived. People often retain their view of a situation even after their emotion changes.

Answer: C Explanation: C) People should never send a message when they are in the midst of an emotional experience. Instead, they should wait for the emotion to pass, then coolly respond. Knowing that emotions don't last more than an hour or so allows communication to be delayed until the intensity of the emotion subsides.

Diff: 2 Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

119) Which communication form is designed to allow users to respond at their own convenience?

A) instant messaging B) email C) fax D) electronic data exchange Answer: B Explanation: B) Though instant messaging allows for a delayed message, IM is designed for users to respond immediately to one another, not to delay their responses.

Of the four choices, only email is designed to allow users to receive a message and then respond either immediately or at some later time when they are ready.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 120) Which of the following is a real time form of communication?

A) email B) fax C) Skype D) extranet Answer: C Explanation: C) Skype is the only real time form of communication given. Skype allows for users to use the Internet to chat in real time using video and sound.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 121) Which company would be least likely to use videoconferencing for a meeting of its designers and marketers?

A) a software company B) a perfume company C) a financial company D) a publishing company Answer: B Explanation: B) Of all of the choices, a perfume company would be most likely to find a live meeting essential. In order to smell the company's products, meeting participants would need to be in the same location at the same time. Only a live meeting would accommodate those requirements.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 122) What is the difference between an intranet and an extranet?

A) An extranet works only within an organization, while an intranet extends to

authorized users who are outside of the organization.

B) An intranet works only within an organization, while an extranet extends to authorized users who are outside of the organization.

C) Both networks do the exact same thing and simply have different names.

D) An intranet has contact with the Internet, while an extranet does not have contact with the Internet.

Answer: B Explanation: B) An intranet is an entirely in-house network that allows individuals within an organization to have their own "private" Internet space. An extranet is similar to an intranet, but it extends the network to special clients and other individuals, allowing them to participate in the otherwise private network.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 123) Which of the following best explains why Internet jargon tends to evolve most quickly from cell phone users rather than computer users?

A) More people use cell phones than ever before, causing them to lead the way in every electronic trend.

B) Cell phone keyboards are small and awkward to use so users abbreviate to avoid typing.

C) Cell phone keyboards are compact and efficient, causing users to type more frequently.

D) Cell phones have abbreviations that are built into their software applications.

These abbreviations tend to get adopted by consumers.

Answer: B Explanation: B) The awkwardness of cell phone keyboards causes users to want to type as little as possible. This results in the emergence of abbreviations of common phrases to allow users to avoid spending time and energy typing.

Diff: 2 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

124) Which of the following best expresses the philosophy of a learning culture within an organization?

A) Knowledge is a resource.

B) Knowledge is a weapon.

C) Knowledge is better than power.

D) Learning is easy.

Answer: A Explanation: A) The idea behind a learning culture is that knowledge is a valuable resource that can be used and exploited. Learning cultures compare knowledge that has been accumulated to other resources, such as money, raw materials, and equipment.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 125) Which of the following is a good example of an organization using a learning culture to further its goals?

A) a company subsidizing the education of its employees in university courses B) a company sharing "tricks" for how to best use a complicated software program C) a company giving bonuses to employees who read books on specific topics D) a company providing free software that is categorized as "educational" Answer: B Explanation: B) A learning culture shares valuable knowledge that has been accumulated by an organization's employees that will help them function in the workplace. Sharing software "tricks" can help employees save enormous amounts of time and allow them to work more efficiently and effectively.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 126) Which kind of structure does a company with a learning culture require?

A) an organic structure B) a highly mechanistic structure C) a hierarchical structure D) a nonhierarchical structure Answer: A Explanation: A) In order to have a learning culture, an organization must have a structure that allows for sharing and allows employees at different levels to collaborate and exchange ideas freely. This is a description of an organic structure.

Diff: 2 AACSB: Communication abilities Objective: 13.2 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 127) Which security risk do today's managers worry about most?

A) employees selling proprietary information to rivals B) employees inadvertently allowing proprietary information to be leaked C) employees inadvertently selling proprietary information to competitors D) employees deliberately sharing gossip with outsiders Answer: B Explanation: B) Managers worry that employees—whether deliberately or unintentionally—are allowing proprietary information to be released to rivals and competitors in the outside world through such things as blog posts, Facebook posts, and tweets. This type of security breach severely damages a company's standing in the marketplace.

Diff: 2 AACSB: Communication abilities Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 128) Which fact best illustrates how disruptive email can be?

A) Almost two-thirds of executives say that they sent out more emails than ever during the past year.

B) Thirty-seven percent of employees say that they received more emails than ever during the past year from executives.

C) Almost half of wi-fi users claim to get antsy if they need to wait an hour before checking their email.

D) It takes 64 seconds for a person to regain his or her train of thought following an email interruption.

Answer: D Explanation: D) The answer that shows the true capacity of emails to disrupt is the response that shows how long it takes for a person to "recover" from an email. Emails are insidious because they can come at any time and cause a worker to divert his or her attention from the work at hand, and the worker won't get back to focusing until more than a full minute has passed.

Diff: 2 AACSB: Use of information technology Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

129) Why should an employee be less than pleased when her employer provides her with a "free" smart phone?

A) The phone and phone plan may be free, but the employee may need to pay the monthly taxes and fees.

B) The phone often implicitly requires the employee to be available on a round-theclock basis.

C) The phone and phone plan may be free, but the employee may need to pay for upgrades and extra data.

D) The phone often implicitly requires the employee to participate on a social media site.

Answer: B Explanation: B) Companies that provide free communication devices often are making the statement that they now expect the employee to be available at all times.

Once the employee accepts the phone, she can no longer claim that she was "unavailable" during any given period of time.

Diff: 2 AACSB: Use of information technology Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 130) In a short essay, list the seven elements of the communication process and explain the process of interpersonal communication.

Answer: The seven elements of the communication process are (1) the communication source, (2) the message, (3) encoding, (4) the channel, (5) decoding, (6) the receiver, and (7) feedback. Before communication can take place, a purpose or thought that the sender wants to express must exist.

This thought is converted to a symbolic form (encoded) such as writing or speech and passed by way of some medium (channel) such as a book to the receiver, who retranslates (decodes) the sender's message by, for example, reading or listening to it.

The result is the transfer of meaning from one person to another. The final step of the process is called feedback, in which the receiver sends a message back to the sender verifying that the original message has been received and understood.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

131) In a short essay, discuss the two best-known types of nonverbal communication.

Answer: Body language refers to gestures, facial expressions, and other body movements that convey meaning. A smile expresses something very different from a frown, for example. Hand motions, facial expressions, body movements, and other gestures can communicate emotions or temperaments such as aggression, fear, shyness, arrogance, joy, and anger. A shrug can express indifference. A fist pump can express resolve and determination. A thumbs-up can express cool confidence.

Verbal intonation refers to the emphasis someone gives to words or phrases—by adjusting volume, accent, timing, and tone—that conveys meaning. A soft, smooth vocal tone conveys a different meaning from one that is harsh and abrasive, for example. Devices such as irony and sarcasm often depend much more on verbal intonation—how the words are said—than the actual words themselves.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 132) In a short essay, explain how filtering can serve as a barrier to effective communication.

Answer: The deliberate manipulation of information by the sender to make it appear more favorable to the receiver is called filtering. Filtering includes selective editing or spinning of information that makes an individual's position look positive. For example, if the rate of a city's unemployment is increasing, the mayor might use filtering to emphasize that the rate of jobs lost has begun to decrease, thereby emphasizing a positive rather than a negative perspective on the situation.

The extent of filtering tends to be a function of the number of vertical levels in the organization and the organizational culture. The more vertical levels there are in an organization, the more opportunities there are for filtering.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

133) In a short essay, explain how selective perception can serve as a barrier to effective communication.

Answer: When receivers selectively see and hear based on their own needs and priorities, they are being selectively perceptive. For example, in an employee review a manager might tell an employee that he is bright and creative but lacks discipline, is often sloppy, and has shown himself to be a poor team player. Rather than focus on the entire review, the employee might use selective perception to see himself in a favorable light only, focusing on only the positive aspects of the review—that he is bright and creative—and disregard the negative aspects—that he is sloppy and undisciplined.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 134) In a short essay, explain how emotions can serve as barriers to effective communication.

Answer: How a receiver feels when a message is received influences how he or she interprets it. Extreme emotions are most likely to hinder effective communication. In such instances, people often disregard rational and objective thinking processes and substitute emotional judgments.

For example, when a manager is upset, he might reject creative ideas that he would ordinarily find intriguing. Similarly, fresh after the elation of a success, a manager might green-light an otherwise dubious project. To avoid letting emotions have undue influence on managerial decisions, managers should always "check their emotions at the door" and allow their emotions time to cool before making important decisions.

Diff: 3 AACSB: Communication abilities Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 135) In a short essay, explain how language can serve as a barrier to effective communication.

Answer: Words mean different things to different people. Age, education, and cultural background are three of the more obvious variables that influence the language a person uses and the definitions he or she gives to words. People may speak the same language, but use of that language is far from uniform. Senders tend to assume that the words and phrases they use mean the same to the receiver as they do to them. This is incorrect and creates communication barriers.

An example of a language problem might include the use of profanity. A company that views itself as "hip" or "urban" might use forms of profanity freely in its communications—something that a more traditional organization might find inappropriate, vulgar, and even shocking.

Diff: 3 AACSB: Communication abilities Objective: 13.1

Learning Outcome: Describe communication skills and the factors affecting communication within an organization 136) In a short essay, explain how national culture can serve as a barrier to effective communication.

Answer: Interpersonal communication isn't conducted in the same way in different locations around the world. In the United States, communication patterns tend to be individual-oriented and clearly spelled out. U.S. managers rely heavily on formal, official written forms of communication to establish hard-and-fast proof of their status and their intentions.

In collectivist countries, such as Japan, much more informal communication takes place, with managers seeking consensus before any official positions are taken or decisions are made. Interpersonal communication is the key in Japan. Once all parties feel comfortable with a position, then they all endorse it collectively.

Diff: 3 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 137) In a short essay, explain how information overload can serve as a barrier to effective communication.

Answer: When the amount of information a person is required to work with exceeds the individual's processing capacity, he or she is experiencing information overload.

When people have more communications than they can deal with, they tend to select out, ignore, pass over, or forget information. Or, they may put off further processing until the overload situation is over.

Diff: 3 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 138) In a short essay, explain how gender can affect communication.

Answer: The differences between men and women may lead to significant misunderstandings and misperceptions. To keep gender differences from becoming persistent barriers to effective communication requires both sexes to be committed to communicating creatively with one other and having some understanding of the other gender's style and proclivities. Both men and women need to acknowledge that there are differences in communication styles, that one style isn't better than the other, and that it takes real effort to talk with each other successfully.

Diff: 3 AACSB: Multicultural and diversity understanding Objective: 13.1 Learning Outcome: Discuss different ways managers work with and promote diversity in organizations

139) In a short essay, explain the ways that groups can "meet" through technology to communicate and share information.

Answer: One-on-one, team, divisional, or organization-wide meetings have always been ways in which organizations share information. The limitations of technology used to dictate that meetings take place among people in the same physical location, but that's no longer the case. Teleconferencing allows a group of people to confer simultaneously using telephone or email group communications software. If meeting participants can see each other over video screens, the simultaneous conference is called videoconferencing. Work groups, large and small, that might be in different locations can use these communication network tools to collaborate and share information.

Diff: 3 AACSB: Use of information technology Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

140) In a short essay, describe four of the eight recommended methods for developing active listening skills.

Answer: Active listening is more than just hearing words; it requires you to concentrate on what is being said and to put forth a concerted effort to understand and interpret the speaker's message. (any four of the following) 1. Make eye contact. Making eye contact with the speaker focuses your attention, reduces the likelihood that you will become distracted, and encourages the speaker.

2. Exhibit affirmative nods and appropriate facial expressions. The effective listener shows interest in what is being said through nonverbal signals. These signals cue the speaker that his or her words are being understood and appreciated.

3. Avoid distracting actions or gestures that suggest boredom. In addition to showing interest, you must avoid actions that suggest that your mind is somewhere else. When listening, don't look at your watch, shuffle papers, play with your pencil, or engage in similar distractions.

4. Ask questions. The critical listener analyzes what he or she hears and asks questions. This behavior provides clarification, ensures understanding, and assures the speaker that you're listening.

5. Paraphrase using your own words. The effective listener uses phrases such as "What I hear you saying is . . ." or "Do you mean . . .?" Paraphrasing is an excellent control device to check on whether you're listening carefully and to verify that what you heard is accurate.

6. Avoid interrupting the speaker. Let the speaker complete his or her thought before you try to respond. Don't try to second-guess where the speaker's thoughts are going.

When the speaker is finished, you'll know it.

7. Don't overtalk. Allow the speaker as much space as he or she needs. Say only what is absolutely necessary and important.

8. Make smooth transitions between the roles of speaker and listener. The effective listener makes transitions smoothly from speaker to listener and back to speaker. This means concentrating on what a speaker has to say and practicing not thinking about what you're going to say as soon as you get your chance.

Diff: 3 AACSB: Analytic thinking Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

141) In a short essay, explain why it is important to refrain from making official communications when you are undergoing an emotional experience.

Answer: Emotions cloud thought and drown out rational thinking. An employee who is angry or upset is likely to say something that he or she regrets. The best policy is that if something disturbs or upsets you, rather than respond right away, wait until the emotion passes and then respond. Similarly, if you are exceptionally happy, you should avoid making important decisions or dealing with highly sensitive and complex situations. Hasty responses in the "heat of the moment" are almost always a mistake.

Diff: 3 AACSB: Analytic thinking Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 142) In a short essay, explain why people's attention often wanders when they are listening to a speaker.

Answer: The human brain can process about 400 words per minute when listening, but the human voice can clearly speak at a rate of only 125-200 words. This mismatch means that listeners are often "way ahead" of speakers, and while they are waiting, their attention often wanes and they get distracted.

Diff: 3 AACSB: Analytic thinking Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 143) In a short essay, explain why good active listening requires that the listener be empathetic to the speaker and his or her situation.

Answer: The goal of active listening is for the listener to fully understand the speaker.

Part of that full understanding is to listen from the point of view of the speaker— without any preconceived notions or hastily arrived at conclusions. This ability to "walk in the footsteps" of the speaker requires that true empathy for the speaker's situation be exercised.

Diff: 3 AACSB: Analytic thinking Objective: 13.1 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

144) In a short essay, describe the benefits of an employee being part of a fully networked organization.

Answer: An employee who is part of a fully networked organization can work flexible hours in a place of his or her choosing. This networked employee does not need to come into "the office" to do work. Instead, work can be done at home, on the road, or from some remote location. The networked employee can also choose when he or she wants to work. If the employee chooses, for example, to get up before dawn and work until early afternoon, take a break to go hiking and then return to work in the early evening, he or she can do it as long as he or she synchronizes with others in the network.

Diff: 3 AACSB: Analytic thinking Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 145) In a short essay, describe the drawbacks of an employee being part of a fully networked organization.

Answer: An employee in a fully networked organization will often have trouble escaping from his or her work. Though the employee may have official "hours," coworkers will think nothing of texting or emailing him or her during all hours of the day or night—and all seven days of the week—if the matter is considered "urgent" enough. The trouble is, in today's business world, so many things are identified as truly urgent that a "networked" employee can get the feeling of never having a break from the job.

Diff: 3 AACSB: Analytic thinking Objective: 13.2 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 146) In a short essay, give an example of how a learning culture can benefit an organization.

Answer: A high-tech manufacturing company purchases a new 3-D copy machine that can do such things as make a "copy" of an automobile engine part or a coffee cup.

Technology enthusiasts in the company spend time learning how to use the new machine, and rather than keep the information to themselves, they write out a small handbook that tells others in the company how to operate the machine and how to get the best results from using it.

Diff: 3 AACSB: Analytic thinking Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

147) In a short essay, give an example of how social networking sites can become a security risk for a company.

Answer: An employee who works as a designer in the Bulger sporting goods company casually tells his Facebook friends that he is working on a tennis racket design that uses X15, a new ceramic material that is incredibly light and strong. When an individual who works for a rival sporting goods company, Hester's, gets wind that Bulger is using X15 in its new rackets through a Facebook connection, Bulger's secret is out. Now Hester's is free to copy Bulger's strategy and use X15 in its own rackets.

Ultimately, the social network leak results in Bulger losing a possible competitive edge in the tennis racket industry.

Diff: 3 AACSB: Analytic thinking Objective: 13.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization Fundamentals of Management, 9e (Robbins) Chapter 14 Foundations of Control 1) Control is the process of monitoring and evaluating activities to ensure that they are being accomplished as planned.

Answer: TRUE Explanation: Managers can't know how successful operations are until they have been compared to a standard.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 2) The criterion that determines the effectiveness of a control system is how well it reduces unnecessary costs.

Answer: FALSE Explanation: Goals, not costs, determine the effectiveness of a control system. The more a control system helps the organization achieve its goals, the more effective and successful it is.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 3) Control is the only managerial function that allows managers to make sure that organizational goals are being met.

Answer: TRUE Explanation: Plans can be carried out with motivated employees, but without monitoring there is no way to be sure that goals are actually being met.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 4) The value of the control function lies in three areas: planning, organizing, and motivating.

Answer: FALSE

Explanation: The value of the control function is seen in three areas: planning, empowering employees, and protecting the workplace.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 5) An effective control system can help managers delegate authority to employees with confidence.

Answer: TRUE Explanation: Empowering employees can be fraught with dangers unless proper control measures are in place to make sure that work is being completed in an efficient, effective, and timely manner.

Diff: 3 Objective: 14.1 Learning Outcome: Describe the components of the control process 6) The control function is not intended to protect the organization from threats.

Answer: FALSE Explanation: A major function of a control system is to protect the organization from threats that might arise from disruptions, security breaches, unexpected financial events, and other similar problems.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 7) Motivation and leadership are two primary parts of the controlling function.

Answer: FALSE Explanation: Motivation and leadership are part of the managerial function of leading, not the controlling function.

Diff: 2 Objective: 14.1 Learning Outcome: Summarize the basic characteristics of major leadership theories 8) Controlling provides a critical link back to planning that compares actual outcomes to planned outcomes.

Answer: TRUE Explanation: Without the assessment that takes place during the controlling function, there is no accurate way to determine whether or not planning goals have been carried out and met.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 9) The control process is a two-step process that measures and compares.

Answer: FALSE Explanation: The control process is a three-step, not a two-step, process that includes measuring performance, comparing performance against a standard, and taking action, if necessary.

Diff: 2 Objective: 14.2

Learning Outcome: Describe the components of the control process 10) The development or identification of objectives or standards must precede the control process.

Answer: TRUE Explanation: The measurement of performance during the control process must have some standard to measure against. Usually the standard is set during the planning phase of the operation being carried out, before the control process begins.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

11) Personal observation as a form of control measurement requires little time.

Answer: FALSE Explanation: Personal observation, in fact, requires a great deal of time, so the statement is false.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 12) MBWA can pick up moods and attitudes that other forms of measurement miss.

Answer: TRUE Explanation: By virtue of it being a personal action, MBWA, or management by walking around, can detect moods, attitudes, tones of voice, and other subjective and emotional forms of information that other types of measurement miss.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 13) In the past, a major drawback of an oral report was that there is no way to store the information in the report for later reference.

Answer: TRUE Explanation: New technologies, such as videotaping oral reports, mean that documentation of an oral report is no longer impossible to carry out.

Diff: 2 AACSB: Communication abilities Objective: 14.2 Learning Outcome: Describe the components of the control process 14) What is measured in the control process is often less critical than how it is measured.

Answer: FALSE Explanation: The opposite is true—what is measured is usually more, not less, important than how it is measured. The criteria that managers choose to measure often defines how an organization will operate.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 15) Some control criteria, such as employee satisfaction and absenteeism, are applicable to almost any management situation.

Answer: TRUE Explanation: In almost all situations, the success of managers is related to how satisfied employees are and how dedicated they are to their jobs, so these criteria are fairly universal.

Diff: 1 Objective: 14.2 Learning Outcome: Describe the components of the control process

16) A gap between actual performance and planned goals that falls within an acceptable range of variation usually requires managerial action.

Answer: FALSE Explanation: Only when the gap between actual performance and goals falls out of an acceptable range of variation is action required.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 17) Henry Ford basing his assembly line on practices he viewed in Chicago slaughterhouses is an example of benchmarking.

Answer: TRUE Explanation: Benchmarking is the practice of adopting methods from other industries to improve your own industry. Ford was indeed benchmarking when he took the division of labor practices seen in slaughterhouses and adopted them in car-building.

Diff: 2 Objective: 14.2 Learning Outcome: Summarize the major historical and current approaches to management 18) A single business cannot experience both underperformance and overperformance at the same time.

Answer: FALSE Explanation: As the example in the chapter reading shows, one part of a business can exceed goals while another segment can underperform. Therefore, both phenomena can occur at the same time.

Diff: 2 Objective: 14.2 Learning Outcome: Summarize the major historical and current approaches to management 19) Immediate corrective action might include changing the way employees are paid for their work.

Answer: TRUE Explanation: Immediate corrective action includes any practice that can work to correct a performance deviation, which could include extra training, stiff discipline, or a new pay scale that, for example, pays employees by the piece rather than by the hour.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 20) Basic corrective action focuses on identifying the cause of a performance deviation.

Answer: TRUE Explanation: Basic corrective action looks to find out how and why performance didn't meet goals, not how to correct the situation.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

21) An example of revising a standard is a teacher who changes a grading scale because students do poorly on an exam.

Answer: TRUE Explanation: Rather than blame poor performance on the students themselves, the teacher in this case assumes that the standard, the grading scale for the test, was too high and adjusts it downward.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 22) The key to feedforward controls is taking action while the problem is occurring.

Answer: FALSE Explanation: The key to feedforward control is taking action before the problem occurs, not while it occurs.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 23) A spell-checker that corrects words as you type in a word processing program is an example of feedforward control.

Answer: FALSE Explanation: A spell-checker that corrects words as they are being typed is making the correction as the event occurs, so it is an example of concurrent control, not feedforward control.

Diff: 2 AACSB: Use of information technology Objective: 14.3 Learning Outcome: Describe the components of the control process 24) Direct supervision is the best-known form of concurrent control.

Answer: TRUE Explanation: When managers directly watch over what workers are doing and make corrections in real time they are using concurrent control.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 25) A GPS that tells you that you are making a wrong turn is an example of concurrent control.

Answer: TRUE Explanation: The GPS is operating in real time and correcting the situation as the event is occurring, making it a concurrent form of control.

Diff: 3 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

26) A major advantage of feedforward control is that it increases employee motivation.

Answer: FALSE Explanation: Feedback control, not feedforward control, is best for motivation because it provides information so employees can know exactly how their performance measures up.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 27) The major drawback of feedback control is that by the time the manager has the information, the problem has already occurred.

Answer: TRUE Explanation: Feedback always takes place after the fact. Therefore, a major drawback to feedback control is that it cannot anticipate problems or deal with ongoing problems.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 28) Liquidity compares the total amount of debt a company has to its total assets.

Answer: FALSE Explanation: Comparing the total amount of debt a company has to its total assets is a measure of leverage, not liquidity.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 29) The acid test compares the difference between current assets and inventories to current liabilities.

Answer: TRUE Explanation: The acid test is used to test liquidity.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 30) Return on investment compares net profit after taxes to total sales.

Answer: FALSE Explanation: Return on investment compares net profit after taxes to total assets, not total sales.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 31) Profitability ratios are a traditional way for a company to measure success.

Answer: TRUE Explanation: Profitability ratio, identified as net profit after taxes over total sales or assets, is a useful traditional way to measure how efficiently company assets produce profit.

Diff: 2

Objective: 14.3 Learning Outcome: Describe the components of the control process 32) Budgets can be effective tools for both planning and controlling.

Answer: TRUE Explanation: Budgets are highly effective planning tools. However, once created, budgets also function as effective controlling tools since they can be used as standards for gauging monetary activity.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 33) A management information system (MIS) focuses on providing managers with the raw data that pertains to the organization.

Answer: FALSE Explanation: The goal of an MIS is to give managers access to useful, processed data that has been organized and interpreted, not raw data.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 34) Firewalls, data backup, and encryption help prevent security breaches in organizations.

Answer: TRUE Explanation: These measures can prevent ordinary breaches for the most part. In rare cases, even with these measures, compromising information can leak out into the world at large, so most organizations need all of the security instruments they can get.

Diff: 2 AACSB: Use of information technology Objective: 14.3 Learning Outcome: Describe the components of the control process 35) A balanced scorecard with respect to organizational performance includes areas that are financial and customer-oriented only.

Answer: FALSE Explanation: A balanced scorecard also includes assets from internal processes within the organization, as well as assets from people, innovation, and growth.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 36) A scorecard with respect to organizational performance should always focus on all four performance areas equally.

Answer: FALSE Explanation: Many organizations choose not to use a balanced approach; instead, they focus disproportionately on one (or more) particular area, such as customer relations, and de-emphasize other areas.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

37) Management of a global company often relies on highly formalized reports as controls for distant operations.

Answer: TRUE Explanation: Without being able to observe a distant operation directly, managers of global companies often need to rely on formal reports and other formal measures.

Diff: 2 AACSB: Dynamics of the global economy Objective: 14.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management 38) Control measures in two different locations in different parts of the world are always comparable.

Answer: FALSE Explanation: In fact, control measures often are not comparable. Profit per worker, for example, may be wildly different in Mexico than it is in France, so control measures must reflect these differences.

Diff: 2 AACSB: Multicultural and diversity understanding Objective: 14.4 Learning Outcome: Describe the components of the control process 39) Employers have the legal right to read personal email of employees if it is sent on a company computer.

Answer: TRUE Explanation: Employers do have the right to monitor private correspondences that take place in the workplace.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Describe the components of the control process 40) Employee theft amounts to less than $450 annually per worker in the United States.

Answer: FALSE Explanation: Estimates show that employee theft averages a loss of about $4500 annually per worker, not $450.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Describe the components of the control process

41) Workplace violence, in all its many forms, affects around 250,000 U.S. workers each year.

Answer: FALSE Explanation: The U.S. National Institute of Occupational Safety and Health says that each year some 2 million American workers are victims of some form of workplace violence, such as verbal abuse, yelling at coworkers, purposeful damage of machines or furniture, or assaulting coworkers.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Describe the components of the control process 42) A rigid, militaristic, high-pressure workplace that includes intimidation is likely to be a dysfunctional work environment.

Answer: TRUE Explanation: Rigidity, pressure, and intimidation are key signs that a workplace is dysfunctional.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Describe the components of the control process 43) The control management function ensures that ________ in an organization.

A) goals are set B) goals are met C) plans are made D) plans are realistic Answer: B Explanation: B) The control function does not involve making plans or setting goals for the future. Instead, control is involved with looking back after plans have been made and seeing that goals have been successfully met, making "goals are met" the correct response.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 44) A major part of the controlling function of management is to ________.

A) formulate strategies B) set standards C) correct performance problems D) structure an organization Answer: C Explanation: C) In addition to making sure that goals have been met, a major function of controlling is to correct performances that are not up to standards, making "correct performance problems" the correct response. Both formulating strategies and setting standards fall primarily under the planning function, while structuring an organization is part of the organizing function.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process

45) The more a control system helps an organization ________, the more successful it is judged to be.

A) meet government guidelines B) help employees achieve job satisfaction C) meet its goals D) help employees be productive Answer: C Explanation: C) The purpose of a control system is first and foremost to help a company achieve its goals, whatever they are, making "meet its goals" the correct response. Though productivity, legal compliance, and job satisfaction are all important to many organizations, they may not be specific goals of a given organization, so they are not correct responses for this question.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 46) A well-run company that has well-thought-out plans, motivated and productive workers, and an efficient organizational structure ________.

A) always attains its goals B) may not always attain its goals C) rarely attains its goals D) has no reason to monitor its performance Answer: B Explanation: B) Though it is likely that a well-run company will attain its goals, only monitoring an organization's activities and comparing them to standards can confirm whether or not those goals have been met. This rules out "rarely attains its goals," since most well-run companies do attain goals, and it also rules out "always attains its goals" because a company may seem to do everything right and still not attain its goals. "Has no reason to monitor its performance" is incorrect because monitoring is the one way in which a company can determine for sure whether it has achieved its goals. Since all other choices have been eliminated, "may not always attain its goals" is the correct response since it correctly identifies the unlikely but still possible eventuality that a company that does all the right things could still fail to attain its goals.

Diff: 3 AACSB: Analytic thinking Objective: 14.1 Learning Outcome: Describe the components of the control process

47) The value of the controlling function is seen in three specific areas: planning, ________.

A) organizing, and leading B) protecting employees, and empowering the workplace C) protecting employees, and protecting the workplace D) empowering employees, and protecting the workplace Answer: D Explanation: D) The value of the controlling function is seen in planning, the empowering of employees, and the protecting of the workplace, making "empowering employees, and protecting the workplace" the correct response and ruling out all other responses.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 48) Controlling is the ________ in the management process.

A) first step B) final step C) most important step D) least important step Answer: B Explanation: B) All four steps in the management process are more or less equal in importance, making both choices regarding importance incorrect responses for this question. Controlling comes after planning, organizing, and leading in the management process, so it is the final, not the first, step in the management process, making "final step" the correct response.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 49) Controlling compares ________ to see if goals are being achieved.

A) planned performance to standard performance B) standard performance to ideal performance C) actual performance to competitor performance D) actual performance to planned performance Answer: D Explanation: D) Controlling compares how the organization actually performed to the goals and plans that were set during the planning stage of the management process, making "actual performance to planned performance" the correct response and ruling out all other responses. If the actual performance matches what was planned, goals are considered met and the organization in most cases can consider itself successful. However, if actual performance is judged to be insufficient for some reason, then the organization will consider its performance to be inadequate and take some kind of action to remedy the situation.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process

50) Effective controlling can help managers who are afraid to delegate authority ________.

A) empower their employees B) set their goals C) maximize risk D) minimize employee empowerment Answer: A Explanation: A) Effective controlling gives managers a way to delegate authority but still make sure that empowered employees are progressing effectively toward organizational goals, making "empower their employees" the correct response and ruling out "minimize employee empowerment" since controlling maximizes rather than minimizes empowerment. Setting goals is not a correct response because controlling takes place long after goals have been set. "Maximize risk" can be eliminated as a correct response because effective controlling would serve to reduce, or minimize, risk, not maximize it.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 51) The controlling function helps managers protect an organization's ________.

A) reputation for honesty B) assets C) position in the community D) good name Answer: B Explanation: B) While protecting an organization's good name, position in the community, and reputation for honesty are all important, none of these functions requires explicit use of the controlling function. Controlling does, however, explicitly protect organizational assets against disruptions and harm of any kind, making "assets" the correct response.

Diff: 2 Objective: 14.1 Learning Outcome: Describe the components of the control process 52) The first step in the control process is to ________.

A) take action B) measure actual performance C) compare performance against a standard D) compare a standard against an ideal Answer: B Explanation: B) The first step in the control process is to find out how the organization went about its business—that is, to measure the actual performance of the organization, making "measure actual performance" the correct response.

Comparing actual performance against a standard is the second step of the control process, while taking action is the final step in the process. Comparing the standard against an ideal is not a step in the control process, making that choice an incorrect response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

53) Managers always use these for performance standards during the control process.

A) goals created during the planning process B) employee opinions C) generic performance standards for the industry D) standards developed by performance experts Answer: A Explanation: A) The performance standards to which the actual performance of the organization is compared during the control process are simply the goals that were created during the planning stage of organizational activity. This makes "goals created" the correct response and eliminates generic or expert-developed standards as correct responses. Employee opinions may be used but are not always part of the process.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 54) A manager measuring actual performance is like a teacher ________.

A) composing a test B) grading a test C) helping a student study for a test D) making an assignment Answer: B Explanation: B) When a teacher composes a test, gives an assignment, or helps a student prepare for a test, she is not actually assessing or measuring performance.

Instead, she is creating the tools for assessing performance. Only when a teacher evaluates the test is she measuring actual performance, making "grading a test" the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 55) This is the most informal form of performance measurement.

A) oral reports B) written reports C) statistical reports D) personal observation Answer: D Explanation: D) Oral reports, statistical reports, and written reports all have specific formats and conventions that are required, making them formal types of performance measurement. For example, a statistical report must include statistical tables or graphs showing how the standard categories of data compare. Personal observations, on the other hand, can take on a variety of different forms and examine a variety of different characteristics and attributes of an organization, making "personal observation" the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

56) MBWA stands for management by ________.

A) work area B) work action C) written action D) walking around Answer: D Explanation: D) MBWA is an informal examination of the workplace that the manager carries out by "walking around," making "walking around" the correct answer and ruling out the other three choices. MBWA allows the manager to get a feel for the work area and the moods and attitudes of the people who work there.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 57) An advantage of management by walking around is ________.

A) perceptual biases B) obtrusiveness C) personal contact D) objectivity Answer: C Explanation: C) Few would try to make the claim that MBWA does not usually suffer from personal biases as one person's outstanding trait might go unnoticed by another observer. Interfering in the daily activities of the workplace can also be the source of misconception in MBWA, making "obtrusiveness" an incorrect response. MBWA is highly subjective rather than objective, so "objectivity" is not correct. Finally, "personal contact" is the correct response because MBWA involves a great deal of personal interaction, which gives managers a valuable view of their workplace.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 58) For a baseball player, a statistical report would feature such things as ________.

A) a newspaper profile of the player B) batting average and slugging percentage C) filmed highlights of great plays D) scouting reports on the player Answer: B Explanation: B) A newspaper article, highlight films, and scouting reports are all measurements of a player's value, but they are not statistical measurements, so they are incorrect responses. Batting average and slugging percentage are statistical measurements, so this choice is the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

59) A disadvantage of a statistical report is that it may leave out ________ measurements of performance.

A) subjective B) objective C) positive D) negative Answer: A Explanation: A) A statistical report is objective rather than subjective and is no more likely to leave out positive or negative performance evaluations than any other form of assessment, making "objective," "positive," and "negative" incorrect responses for this question. Since a statistical report is objective, it tends to disregard subjective information, making "subjective" the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 60) This type of performance measurement format would be most likely to include graphs, tables, and computer outputs.

A) oral report B) statistical report C) MBWA D) written report Answer: B Explanation: B) Since neither an oral report nor MBWA includes written material, neither would be likely to feature charts and graphs, making those two choices incorrect responses. A written report might include quantitative data, but quantitative data would not be an essential element of the report as it would be in a statistical report. This makes "statistical report" the correct response and eliminates "written report" as a correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 61) This kind of performance measurement method is fast and is a good platform for feedback, yet it can be private and scheduled for a single employee ahead of time.

A) written report B) MBWA C) oral report D) statistical report Answer: C Explanation: C) Both statistical and written reports are slow and do not allow for immediate feedback, so those two choices can be eliminated. MBWA and oral reports are both fast and allow for feedback, but MBWA is not private and cannot be personally scheduled, making "oral report" the correct response and ruling out "MBWA." Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 62) The most comprehensive form of performance measurement is this.

A) MBWA B) oral report C) statistical report D) written report Answer: D Explanation: D) The informality of MBWA and oral reports make them less complete and thorough than statistical and written reports, making those two choices incorrect responses. Statistical and written reports are both readable documents, but a written report is likely to be more comprehensive since it could include both quantitative and qualitative information, while a statistical report would be quantitative only (or primarily), making "written report" the correct response and ruling out "statistical report."

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 63) Steve has a taped record of a one-on-one meeting with his boss.

A) a statistical report B) an oral report C) MBWA D) a written report Answer: B Explanation: B) A one-on-one meeting is a personal interaction, not a written-out document, so both a "statistical" and "written" report can be ruled out as correct responses since both are characterized by written documents. Both oral reports and MBWA are personal interactions, but MBWA is a group interaction rather than a oneon-one meeting, so "MBWA" cannot be a correct response. An "oral report" is the correct response because it is a personal interaction and because it was taped—a characteristic of an oral report but not MBWA. Diff: 3 Objective: 14.2 Learning Outcome: Describe the components of the control process

64) Jessie's assigned work section consists of three work groups who were assessed by this method of performance measurement and were informally judged to be "creative, innovative, hard-working, and fun-loving."

A) MBWA B) written report C) statistical report D) oral report Answer: A Explanation: A) The subjective, informal character of the assessment rules out both "written" and "statistical" report as possible right answers for this question since written and statistical methods tend to be formal. The assessment is more impressionistic than specific, more a sense of an entire work area than an evaluation of an individual or a specific group, making "MBWA" the correct response and ruling out "oral report."

Diff: 3 Objective: 14.2 Learning Outcome: Describe the components of the control process 65) These forms of performance measurement provide the best and most immediate forms of feedback.

A) oral report and written report B) written report and statistical report C) MBWA and oral report D) statistical report and MBWA Answer: C Explanation: C) The three incorrect choices include written-document forms of measurement (written and statistical reports), so they can be ruled out since the most effective forms of feedback are generally verbal (including intonation, facial expressions, and body language) and immediate. This makes "MBWA and oral report" the correct response since both MBWA and oral reports are verbal forms of evaluation that allow evaluators and subjects to interact and exchange feedback and other forms of information personally.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 66) What managers choose to measure is largely determined by A) what an organization does well.

B) the organization's structure.

C) the company's image.

D) the leaders and leadership style of those in the organization.

Answer: A Explanation: A) The choice of what managers measure in terms of performance largely determines what the organization will try to excel at. While structure, leadership, and image can be affected by choice of performance measurement, these items are not directly affected, so they are incorrect responses.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

67) A car company that puts more effort into measuring quality than total units sold most likely wants to excel at ________.

A) customer satisfaction B) efficiency C) employee satisfaction D) cost per unit Answer: A Explanation: A) The company is showing its priorities by what it chooses to measure.

Since it is concerned with quality, the company is clearly less interested in efficiency and unit cost than how satisfied its customers are, making "customer satisfaction" the correct response. Employee satisfaction is not directly related to measuring quality, so it is not a correct response.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 68) A software company that puts almost all of its performance measurement effort into measuring the total number of units that the company and its competitors sell most likely wants to excel at ________.

A) efficiency B) market share C) cost per unit D) labor per unit Answer: B Explanation: B) The company is showing its priorities by what it chooses to measure.

Since it is concerned with the total sales of itself and its competitors, the company is clearly more interested in market share than efficiency, cost per unit, or labor per unit.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

69) A state motor vehicles agency that is interested in serving the public might choose to measure ________.

A) total revenue rather than customer wait time B) total customers rather than total revenue C) customer wait time rather than total customers D) employee turnover rather than customer wait time Answer: C Explanation: C) Since the agency is interested in serving the public, its priority should be something that the public cares about—how long it needs to wait to be processed at the agency—making "customer wait" the correct response. The number of customers and revenue they generate are clearly secondary concerns for an organization whose primary aim is to serve the public. Employee turnover rate does not involve customers, so it can also be ruled out as a correct response.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 70) Which of the following performance measurement categories must be measured subjectively rather than in objective or quantifiable terms?

A) budget B) absenteeism C) efficiency D) job satisfaction Answer: D Explanation: D) A budget, absentee data, and efficiency data can all be tallied and quantified using objective numerical values. Job satisfaction, on the other hand, is a more subjective thing to rate that often relies on feelings and impressions rather than quantifiable facts, making "job satisfaction" the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

71) The second step in the control process is to ________.

A) compare a standard against an ideal B) measure actual performance C) compare performance against a standard D) take action Answer: C Explanation: C) The first step in the control process is to find out how the organization went about its business—that is, to measure the actual performance of the organization. Comparing that actual performance against a standard is the second step of the control process, making that choice the correct response. Taking action is the final step in the process. Comparing the standard against an ideal is not a step in the control process, making that choice an incorrect response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 72) To carry out the second step of the control process, managers at an electric shaver company need to compare the number of actual shavers sold to ________.

A) a competitor's sales totals B) planning goals for sales totals C) sales totals from last year D) the number of possible shaver customers Answer: B Explanation: B) The second step of the control process compares actual performance to goals that have been determined in the planning stage of the managerial process, making "planning goals" the correct response. This means that while sales totals from last year, a competitor, and a comparison with the total number of potential customers may be meaningful, they are not the stated goals laid out in the planning process, so they are incorrect responses.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

73) In the second step of the control process, actual performance can be considered acceptable as long as the performance doesn't fall ________.

A) short of goals by more than 15 percent B) short of goals by more than 30 percent C) inside an acceptable range of variation D) outside an acceptable range of variation Answer: D Explanation: D) There are no hard and fast rules with respect to deviation. One situation might allow a 50 percent deviation, while a second might determine that a 5 percent deviation is too high. Therefore, all that is required is that deviation fall within the individual manager's accepted variation range, making "outside an acceptable range" the correct response and ruling out "inside an acceptable range." The other two choices are not correct because they quantify performance limits.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 74) In general, ________ that falls outside an acceptable range of variation must be dealt with by a manager.

A) an overperformance B) an underperformance C) any deviation D) a small overperformance or a large underperformance Answer: C Explanation: C) By definition, any deviation that lies outside an acceptable range of variation is unacceptable, therefore, it must be dealt with. This means that "any deviation" is the correct response and the other three choices are incorrect because they are too limited in scope. What matters is that performance lies outside the acceptable range, not whether performance is above or below that range.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

75) The third step in the control process is to ________.

A) measure actual performance B) compare a standard against an ideal C) take action D) compare performance to a standard Answer: C Explanation: C) The first step in the control process is to find out how the organization went about its business—that is, to measure the actual performance of the organization. Comparing that actual performance against a standard is the second step of the control process. Taking action is the third and final step in the process, making "take action" the correct response. Comparing the standard against an ideal is not a step in the control process, making that choice an incorrect response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 76) When actual performance falls outside an acceptable range of variation, it is termed a(n) ________.

A) significant deviation B) insignificant deviation C) acceptable deviation D) large deviation Answer: A Explanation: A) Any measure of actual performance that does not fall within the limits of what the manager has termed an acceptable range of variation is termed a significant deviation, making this choice the correct response and eliminating all other responses. Note that a significant deviation is defined entirely by the situation and the manager. The same deviation in two different situations, or when evaluated by two different managers, may be assessed differently.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 77) When should a manager's course of action be to do nothing?

A) when the cause of the variation has been identified B) when the standard is acceptable C) when the standard is not acceptable D) when the variance is acceptable Answer: D Explanation: D) By definition, when the variance of performance is within an acceptable range, it means that the manager finds that performance level to be functional or better, so there is no need to take corrective action. This makes "acceptable variance" the correct response and rules out all other responses.

Diff: 1 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 78) Actual performance falls far short of planned goals, yet a manager takes no action.

Assuming this manager is a reasonable person and is not mistaken, what is the most

likely cause of his inaction?

A) He does not trust the data.

B) He does not consider the deviation significant.

C) He does not trust the goals that were set.

D) He does not believe in corrective action.

Answer: B Explanation: B) The operative word here is reasonable—one assumes that the possibility of the manager failing to believe in corrective action, failing to trust goals that were set, and failing to believe performance data is fairly unreasonable—making "does not consider the deviation significant" the only reasonable choice and, therefore, the correct answer. Why would a manager fail to see a large deviation from a standard as significant? It could be anything—special circumstances, new developments, etc. What matters here is that the manager expanded his range of acceptable deviation for some legitimate reason and the performance fell within that expanded range.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 79) Which of the following is NOT a recognized possible course of action for managers to take when actual performance falls outside an acceptable range of variation?

A) take corrective action B) change the standards C) ignore the performance data D) do nothing Answer: C Explanation: C) Corrective action, doing nothing, and changing standards are recognized ways of dealing with significant deviations. Ignoring the data is neither a recognized way of dealing with deviations nor a responsible way for a manager to behave, making "ignore the performance data" the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

80) If a manager of a tennis store sees sales totals for a particular racquet significantly exceeding goals and deviating from acceptable range of variation, she might ________.

A) do nothing since sales exceeded goals B) run a sale on the racquet C) run a sale on other products D) inquire about ordering more racquets Answer: D Explanation: D) Since the totals were outside an acceptable range of variation, the manager clearly must do something, so "do nothing" can be ruled out. Running a sale on the racquet would decrease profits, so that choice can also be ruled out. Running a sale on other products is irrelevant since other products are not outside an acceptable range of deviation. The best thing for the manager to do is find out about ordering more racquets—if demand increases, she may be caught without enough supply in the months to come.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 81) After an extended period of unseasonably warm and sunny weather, revenues at an indoor tennis club are down sharply during the month of November, but are in line with what managers expected for the month. The best strategy for the club manager is to ________.

A) do nothing B) run a sale on hourly rates C) raise hourly rates to increase revenue D) change her monthly goals for December Answer: A Explanation: A) The deviation in this case falls within an acceptable range. The drop in customers had an explainable cause—unusually nice weather—that is not likely to become a chronic problem. There is no reason to assume that December will be just as warm as November, so the manager should not change her goals, run a sale, or raise rates. The best strategy is to sit tight and wait for the customers to come in during December, making "do nothing" the correct response.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

82) Due to a recent construction of an upscale housing community near a tennis club, customer use has skyrocketed during the year and the club is operating at all-time high levels, far beyond the goals set the previous year. The best strategy for the manager is to ________.

A) do nothing B) run a sale to increase customers C) advertise D) change goals for the following year Answer: D Explanation: D) In this situation, advertising and running a sale are likely to increase customers beyond what the club can handle, so those choices can be ruled out. Doing nothing may not harm the situation, but a better response to increased demand is to change the club's goals so performance and goals once again fall within an acceptable range of variation.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 83) Immediate corrective action is designed ________.

A) to get to the root cause of a problem B) to get performance back on track C) to shake up an organization D) to punish employees for poor performance Answer: B Explanation: B) Immediate corrective action is the simplest corrective action a manager can take. It solves the problem at hand quickly and effectively without necessarily getting at root causes or shaking up the organization. While immediate corrective action may include punishment, it would not necessarily require punishment, so that choice is not a correct response. These factors make "get performance back on track" the correct response as it is the only choice that deals purely with performance.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 84) For addressing the hardships accompanying unemployment, this is an example of immediate corrective action.

A) a job training program B) food stamps C) a task force to see why jobs were lost D) a job placement agency Answer: B Explanation: B) Immediate corrective action should directly remedy the problem at hand. While training programs, task forces, and job agencies might help a person who lost a job in the long term, over the short term, only food stamps address the problem at hand, which is the lack of ability to feed one's family, making "food stamps" the correct response.

Diff: 2 Objective: 14.2

Learning Outcome: Describe the components of the control process 85) For addressing unemployment, this is an example of basic corrective action.

A) a task force to see why jobs were lost B) food stamps C) unemployment compensation D) a job training program Answer: A Explanation: A) Basic corrective action gets at root causes of performance deviations.

Food stamps, unemployment compensation, and training programs do not identify root causes of unemployment, they simply remedy unemployment. A task force can determine root causes of unemployment, making that choice the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 86) In many cases, immediate corrective action rather than basic corrective action is taken by managers because they ________.

A) want to be thorough B) lack time C) lack information D) don't understand the situation Answer: B Explanation: B) Many managers occupy their time "putting out fires" and don't have the time to get to the root causes of deviations, so they take immediate corrective action rather than basic corrective action to solve problems. This makes "lack time" the correct answer and rules out other choices.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process 87) Which of the following would constitute basic corrective action for employees whose production has dropped?

A) changing the pay scale B) taking away employee privileges C) looking for causes of the production drop D) changing how the work is carried out Answer: C Explanation: C) The three incorrect choices are short-term immediate corrective actions that address the problem but not the cause of the problem. Changing pay, removing privileges, and changing work practices may increase production, but these acts may not get at the cause of the production drop. Only "look for causes" gets at causes of the production drop, so it is the correct response.

Diff: 2 Objective: 14.2 Learning Outcome: Describe the components of the control process

88) A law firm manager finds that one lawyer who consistently outperforms other lawyers at the firm is threatening to leave. Which immediate corrective action should the manager take?

A) none B) offer a bonus C) disciplinary action D) a study to see why she outperforms others Answer: B Explanation: B) Although no action might sound like a reasonable response, this performance is recognized as a significant deviation, so some kind of corrective action is required. Disciplinary action can be ruled out since it is a punishment rather than a reward, while a study is a basic corrective action, not an immediate corrective action. The only action that makes sense is a monetary reward, offering a bonus.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 89) A law firm manager finds that the firm loses too many of its civil cases while it wins an inordinately high number of its criminal cases. Which basic corrective action can the manager take?

A) pay criminal lawyers more B) pay civil lawyers less C) analyze civil and criminal cases D) fire civil lawyers Answer: C Explanation: C) Paying lawyers more or less and firing lawyers are immediate corrective actions that will not get at the root cause of the problem. Only an analysis of the situation, a basic corrective action, might uncover the disparity in the two kinds of cases, making "analyze civil and criminal cases" the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

90) When might a manager be justified in revising a standard rather than taking corrective action to remedy a significant performance deviation?

A) when performance exceeds the standard B) when performance falls slightly short of the standard C) when performance falls far short of the standard D) when the standard is unrealistic Answer: D Explanation: D) The only reason to revise standards is when they are proven to be unreasonable or unrealistic for some reason, making that choice the correct response.

Whether or not performance measures up to the standard is a reason to take corrective action, not change standards, unless, of course, those standards are flawed in some way.

Diff: 2 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 91) A professor gives a new test to an otherwise typical class and finds that only 10 percent of the students get grades of C or above. What is the most appropriate and fair response?

A) do nothing B) revise the grading curve downward C) revise the grading curve upward D) revise the test itself Answer: D Explanation: D) Doing nothing would leave most of the class with a poor grade, so that is an unappealing and probably unfair response. Revising the curve upward is inappropriate since it would mean even fewer students get acceptable grades.

Revising the curve downward would remedy the grading problem, but it would not be the best response because there is probably something wrong with the test itself since a typical class performed so poorly. Thus, the best response would be to change the test itself, making that choice the correct response.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 92) All of the following are dangers of revising production goals downward EXCEPT ________.

A) it destroys incentive to work harder B) it increases incentive to work harder C) it gives employees an excuse to be less productive D) it gives employees something to blame for their lack of effort Answer: B Explanation: B) Destroying incentive and giving employees excuses or something to blame are legitimate reasons not to revise production goals downward, so they are incorrect responses. Revising goals downward does not increase incentive, so "it increases incentive" is the correct response here since it is untrue.

Diff: 2 Objective: 14.2

Learning Outcome: Describe the components of the control process 93) Which kind of control takes place before the actual work is carried out?

A) feedback B) concurrent C) recurrent D) feedforward Answer: D Explanation: D) Feedforward control occurs prior to the actual activity taking place in an attempt to prevent problems before they occur, making "feedforward" the correct response. Feedback control occurs after the activity has taken place in an attempt to correct actions that have already occurred and prevent future mistakes.

Concurrent control occurs during an activity in an attempt to get live input into the process itself. Recurrent control is not a recognized control term.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 94) A cell phone maker tests its new model with a sample audience when it is fully operational. What kind of control is this?

A) pre-market control B) feedback control C) concurrent control D) feedforward control Answer: B Explanation: B) Since the phone has already been created, the company is using feedback control because the samplers are reporting on features that already exist.

Concurrent control would have samplers participate in the designing and manufacturing processes themselves. Feedforward control would have samplers participate in the planning of the phone. Pre-market control is not a recognized control term.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

95) Which kind of control takes place while the actual work is carried out?

A) feedback B) concurrent C) reverse D) feedforward Answer: B Explanation: B) Feedforward control occurs prior to the actual activity taking place in an attempt to prevent problems before they occur. Feedback control occurs after the activity has taken place in an attempt to correct actions that have already occurred and prevent future mistakes. Concurrent control occurs during the activity itself in an attempt to get live input into the process itself. Reverse control is not a recognized control term.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 96) Direct supervision of employees is a form of ________ control.

A) concurrent B) ineffective C) feedback D) feedforward Answer: A Explanation: A) The best-known form of concurrent control occurs when a manager directly supervises an employee, telling him or her what to do while the work is being carried out. This makes "concurrent" the correct response and rules out all other responses.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 97) An action show producer has a read-through of a half-written show in which actors, writers, producers, and the director are free to make comments and changes before the show is filmed. What kind of control is being used?

A) feedback control B) concurrent control C) spontaneous control D) feedforward control Answer: D Explanation: D) Feedforward control is being used because the participants can make changes in the show before it is filmed Feedback control would have participants making comments about the show after it was finished, while concurrent control would have participants talk about what they would like to see in the show while it is the process of being filmed. Spontaneous control is not a recognized control term.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

98) A fast-food restaurant is querying prospective customers about the features they would like to see in a new panini sandwich. What kind of control is being used?

A) concurrent control B) feedback control C) feedforward control D) anticipation control Answer: C Explanation: C) Since the company is asking for input before the actual product exists, feedforward control is being used, making this choice the correct response.

Feedback control would have participants making comments about the sandwich after it was created, while concurrent control would have customers participate in the actual creation of the sandwich. Anticipation control is not a recognized control term.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 99) Which kind of control takes place after the actual work has been carried out?

A) feedback B) forward C) feedforward D) concurrent Answer: A Explanation: A) Feedback control occurs after an activity has taken place in an attempt to correct actions that have already occurred and prevent future mistakes, making "feedback" the correct response. Feedforward control occurs prior to the actual activity taking place in an attempt to prevent problems before they occur.

Concurrent control occurs during the activity itself in an attempt to get live input into the process itself. Forward control is not a recognized control term.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

100) A basketball coach showing players how to position themselves on the court during practice is carrying out ________, a form of concurrent control.

A) unstructured supervision B) direct supervision C) indirect supervision D) feedback supervision Answer: B Explanation: B) Coaching is a form of direct supervision since the coach is directing the actions of individuals while the activity (playing basketball) is taking place, making "direct supervision" the correct response. Coaching would not qualify as feedback since it occurs as the activity is taking place, nor is coaching indirect or unstructured since the coach is directly interacting with players in a highly formalized manner.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 101) One advantage of feedback control over other forms of control is that it lets managers focus on ________.

A) what is about to take place B) how on target their planning efforts were C) how effective their organizing efforts were D) the task as it is being carried out Answer: B Explanation: B) "What is about to take place" identifies feedforward rather than feedback control, so it is incorrect. "The task as it is being carried out" identifies concurrent rather than feedback control, so it is also incorrect. Feedback requires managers to compare actual performance to goals. When goals and performance match closely, managers can conclude that their planning efforts were on target. This makes "how on target their planning efforts were" the correct choice and rules out "how effective their organizing efforts were" since it refers to the organizing, rather than the planning, process.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

102) When feedback control shows that planning goals and actual performance were dramatically different, the most likely conclusion is that ________.

A) planning was not on target B) performance measurements were unreliable C) planning was on target D) goals do not need to be changed Answer: A Explanation: A) When goals and actual performance are wildly different, one can conclude that the goals were off in some way, making "planning was not on target" the correct response and ruling out that it was on target. Concluding that honest measurements were inaccurate is possible but not a likely or reasonable assumption, so "performance measurements were unreliable" is not correct. "Goals do not need to be changed" is incorrect because if anything, when goals and performance are very different, goals do need to be changed.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 103) An advantage of feedback control is that it improves ________.

A) motivation B) productivity C) employee-manager relations D) employee-employee relations Answer: A Explanation: A) Though feedback control may marginally or indirectly improve productivity, relations between employees, or relations between managers and employees, none of these effects has been identified as a primary benefit of feedback control. Motivational improvements, on the other hand, have definitely been seen as the result of feedback, making "motivation" the correct response. Feedback gives workers a view of how well they are doing and what they need to do to improve, so it increases motivation to attain that improvement.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 104) Managers exert financial control on an organization using ________ analysis.

A) activity B) productivity C) ratio and budget D) productivity and resource Answer: C Explanation: C) Financial controls on organizations are applied using ratio and budget analyses, making that choice the correct response and ruling out all other responses. Ratio analysis includes the computation of such things as liquidity, leverage, and profitability.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

105) ________ is a measure of an organization's ability to meet its current debt obligations.

A) Leverage B) Activity C) Liquidity D) Profitability Answer: C Explanation: C) Liquidity, the ratio of current assets to current liabilities, is a measure of an organization's ability to meet its debt payments, making that the correct response. Leverage, the ratio of total debt to total assets, is a measure of how much debt a company has to finance its assets. Activity, the ratio of sales to inventory, is a measure of how well a company uses its assets. Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a company is at using its assets to generate profits.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 106) ________ is a measure of an organization's ability to meet its current debt obligations.

A) Profitability B) Activity C) Leverage D) Liquidity Answer: B Explanation: B) Activity, the ratio of sales to inventory, is a measure of how well a company uses its assets, making that choice the correct response. Leverage, the ratio of total debt to total assets, is a measure of how much debt a company acquires to finance its assets. Liquidity, the ratio of current assets to current liabilities, is a measure of an organization's ability to meet its debt payments. Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a company is at using its assets to generate profits.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

107) ________ is a measure of an organization's ability to meet its current debt obligations.

A) Profitability B) Liquidity C) Activity D) Leverage Answer: D Explanation: D) Leverage, the ratio of total debt to total assets, is a measure of how much debt a company acquires to finance its assets, making that choice the correct response. Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a company is at using its assets to generate profits. Liquidity, the ratio of current assets to current liabilities, is a measure of an organization's ability to meet its debt payments. Activity, the ratio of sales to inventory, is a measure of how well a company uses its assets.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 108) ________ is a measure of how readily a company can use its assets to generate profits.

A) Profitability B) Leverage C) Liquidity D) Activity Answer: A Explanation: A) Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a company is at using its assets to generate profits, making that choice the correct response. Liquidity, the ratio of current assets to current liabilities, is a measure of an organization's ability to meet its debt payments. Activity, the ratio of sales to inventory, is a measure of how well a company uses its assets. Leverage, the ratio of total debt to total assets, is a measure of how much debt a company acquires to finance its assets.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

109) A company looks at its expenses and finds that its payments to freelancers increased significantly over the past few months, exceeding the budget by 25 percent.

This is an example of ________.

A) using a budget for planning B) using data to confirm a budget C) justifying expenses with a budget D) using a budget for monitoring and controlling Answer: D Explanation: D) A budget can be used as a planning tool or as a monitoring and controlling tool. In this example, actual expenses are compared to the amount reserved for expenses in the budget and a discrepancy is found. This is an example of using a budget to monitor and control business operations.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 110) A company looks at its expenses and finds that its payments to freelancers increased significantly over the past few months, exceeding the budget by 25 percent.

Which of the following is the most reasonable action for the company to take?

A) revise the budget B) fire the people who were responsible for the expenses C) ignore the expenses as an aberration D) see what the expenses were for Answer: D Explanation: D) Revising the budget, firing the people who were responsible for the expenses, and ignoring the data are all hasty and foolish options. The only useful option would be to investigate the expenses to see if they were legitimate.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

111) A company looks at its expenses and finds that its electricity costs have increased, exceeding the budget by 20 percent. Which of the following would be most likely to require immediate action on the part of the company?

A) Overall costs for electricity have gone up by 25 percent.

B) Overall utility costs have gone up by 15 percent.

C) Overall costs for electricity have gone down by 5 percent.

D) Overall utility costs have stayed steady.

Answer: C Explanation: C) The fact that electricity costs have gone down but the company's electricity bill has gone up indicates a situation that warrants further investigation and perhaps immediate action if the increase cannot be somehow justified.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 112) When a budget is formulated, it is being used as a(n) ________ tool.

A) organizing B) controlling C) planning D) leadership Answer: C Explanation: C) When first formulated, a budget functions as a planning tool because it is used to estimate costs and allocate resources in the future. This makes "planning" the correct response and eliminates the other three choices because they refer to management functions that occur later in the sequence.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 113) When a budget is used for controlling, it provides ________ against which resource consumption can be compared.

A) quantitative standards B) qualitative standards C) flexible standards D) nonnumerical standards Answer: A Explanation: A) A budget provides definite, quantitative standards that can be used for comparison with actual consumption data, making "quantitative standards" the correct response. Budgets provide precise quantities that are clearly not nonnumerical, flexible, or qualitative.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

114) A household that cuts back on supermarket spending after going overbudget on its food budget is using the budget as a(n) ________.

A) planning tool B) controlling tool C) organizing tool D) leading tool Answer: B Explanation: B) In this case, the budget is being used as a controlling tool because the household is adjusting its consumption as a result of exceeding its budget in a particular area. The budget is providing a check on spending. This makes "controlling tool" the correct response. When the budget was first formulated, it was being used as a planning tool. Later, when the budget was used to guide spending, it was being used as a leadership tool. When the budget helped determine who was going to buy what and when, it was being used as an organizing tool.

Diff: 2 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 115) A family that is using a computer program to create a formal household budget is using the budget as a(n) ________.

A) planning tool B) controlling tool C) organizing tool D) leading tool Answer: A Explanation: A) Here, the budget is being used as a planning tool because the family is creating a household spending plan, making "planning tool" the correct response for this question. The budget is not being used as a controlling tool because it is simply a plan at this stage; it is not allowing family members to adjust their behavior, making "controlling tool" an incorrect response. Later, if the budget gets used to guide spending, it will be used as a leadership tool. Similarly, if the budget is referred to help determine who is going to buy what and when, it will be used as an organizing tool.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

116) A management information system (MIS) provides managers with ________ data.

A) analyzed and processed B) raw C) unanalyzed D) numerical Answer: A Explanation: A) An MIS is useful because it provides managers with organized, processed, useful forms of data, not data that is raw or unanalyzed. "Numerical" is not correct because much of the data that an MIS supplies will not be numerical.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 117) All of the following are important in efforts to protect information in an organization EXCEPT ________.

A) firewalls B) encryption C) search engines D) data backups Answer: C Explanation: C) Firewalls protect information by providing barriers that prevent hackers and other unauthorized users from accessing organizational files. Encryption protects information by encoding data into a form that can't be penetrated or accessed by unauthorized users. Data backups protect information by saving valuable files that can get lost or damaged in a computer system. Search engines are the one choice in this question that are not explicitly used for protecting information, so this choice is the correct response.

Diff: 2 AACSB: Use of information technology Objective: 14.3 Learning Outcome: Describe the components of the control process 118) A balanced scorecard approach creates goals in four key performance areas and assesses ________.

A) whether all four goals are met B) whether all four goals are met equally C) whether any of the four goals are met D) which goals are exceeded Answer: B Explanation: B) A balanced approach sets goals in four performance areas—financial, customer, internal processes, and people/innovation/growth—and assesses how well balanced the company's performance is, making "whether all four goals are met equally" the correct response and eliminating all other responses.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process

119) When a company's scorecard is not balanced, it usually tends to overemphasize the area that ________.

A) involves customers B) has to do with productivity C) best matches its organizational style and philosophy D) contrasts most with its organizational style and philosophy Answer: C Explanation: C) Companies strive for a balanced approach but in reality shade toward the area that best matches their style, making that choice the correct response. For example, a bottom-line oriented company's scorecard will favor the financial area, while an innovative company's scorecard might lean toward the people/innovation/growth area.

Diff: 2 Objective: 14.3 Learning Outcome: Describe the components of the control process 120) In general, the greater the distance between the home office of a global company and its branch, the ________.

A) more formalized the controls B) less formalized the controls C) more automated the controls D) less automated the controls Answer: A Explanation: A) Though branches of global companies like Seven-Eleven do use automated controls to keep tabs on such things as inventory, there is no predictable relationship between distance and automation, so both choices regarding automation are incorrect responses. There is a clear relationship between distance and the formalization of control—longer distances tend to require more formal control mechanisms—making "more formalized" the correct response and eliminating "less formalized."

Diff: 2 AACSB: Dynamics of the global economy Objective: 14.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management

121) In which country would highly centralized decision making be more likely to be prevalent?

A) Mexico B) Scotland C) Japan D) Australia Answer: A Explanation: A) In less technologically advanced countries such as Mexico, direct supervision and highly centralized decision making are more common than in advanced countries, where computer technology takes care of many monitoring functions. This makes "Mexico" the correct response for this question and rules out more technologically advanced countries like Scotland, Japan, and Australia.

Diff: 2 AACSB: Dynamics of the global economy Objective: 14.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management 122) Direct supervision as a basic means of control is much more common in ________ A) small countries B) democracies C) more technologically advanced countries D) less technologically advanced countries Answer: D Explanation: D) In countries that are technologically advanced, computers often play an important role in monitoring basic transactions. For example, supermarket bar codes monitor sales and inventories in places where they are available. In less technologically advanced places, there is no choice but for direct supervision and monitoring to be used instead of these electronic forms of control, making "less technologically advanced" the correct response and ruling out "more technologically advanced" as a correct response. Whether a country is small or a democracy has no bearing on how technologically advanced it is, so these choices are not correct.

Diff: 2 AACSB: Use of information technology Objective: 14.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management

123) When comparing Mexico to Scotland, you would expect Scottish workers to have ________.

A) greater productivity but lower labor cost per worker B) lower productivity but higher labor cost per worker C) greater productivity and higher labor cost per worker D) lower productivity and lower labor cost per worker Answer: C Explanation: C) As a more technologically advanced country, you would expect a Scottish facility to be less labor intensive and more productive per worker than a Mexican facility, making "greater productivity and higher labor cost" the correct response. Both choices regarding lower productivity can be ruled out because they indicate lower productivity. "Greater productivity but lower labor cost per worker" is not a correct response because it identifies lower, not higher, labor costs per worker.

Diff: 2 AACSB: Dynamics of the global economy Objective: 14.4 Learning Outcome: Identify the fundamental concepts and issues of international business and management 124) Which statement about employee privacy is correct?

A) Employers have a legal right to monitor on-the-job employee phone calls.

B) Employers have no legal right to monitor on-the-job employee phone calls.

C) Employers have the legal right to monitor all employee phone calls.

D) Employers do not have the right to monitor any employee phone calls.

Answer: A Explanation: A) The correct statement is that employers have the right to monitor any workplace activity, whether it is phone calls, computer use, or some other activity.

This right makes the choice indicating no legal right to monitor on-the-job phone calls an incorrect response. What employers don't have is the right to intrude in employees' lives outside of the workplace, making the choice indicating a legal right to monitor all phone calls an incorrect response. "Employers do not have the right to monitor any phone calls" is not correct because it rules out all phone calls, and clearly employers can monitor in-house workplace calls.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management

125) Which of the following employer practices is NOT legal?

A) reading employee email B) monitoring employees in a bathroom C) tracking an employee's whereabouts in the workplace D) monitoring an employee's personal home computer Answer: D Explanation: D) Surprisingly, employers can legally read email, monitor employees anywhere in the workplace, including the bathroom, and track employees' whereabouts in the workplace. What employers cannot do is monitor anything of a personal nature at home or away from the workplace, making "monitoring an employee's personal home computer" the correct response.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 126) Of the following choices, this is the most common reason for companies firing employees.

A) misuse of office phones B) inappropriate computer use C) watching online video D) leaking company secrets Answer: B Explanation: B) Though abuse of office telephones is a major concern for companies, it is small compared to overall inappropriate computer use, which includes shopping, video, emailing, and web surfing. "Watching online video" is incorrect because watching online video is part of overall inappropriate computer use. "Leaking company secrets" is also a major problem, but there are no statistics that show the problem is even remotely as widespread as computer abuses.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management

127) This has proved to be very helpful in establishing culpability in sexual harassment cases.

A) monitoring phone calls B) monitoring emails C) monitoring employee whereabouts D) monitoring Internet use Answer: B Explanation: B) Though the monitoring of phone calls might be marginally helpful in battling sexual harassment, emails have proven to be a major way to find out what really happened in these cases, making "monitoring emails" the correct response. A common way for alleged harassers and victims to communicate is via email, so harassment cases almost always leave an email trail. If companies keep email records, they can recreate events and often eliminate ambiguity in these cases. Monitoring employee whereabouts and overall Internet use have no real bearing on harassment cases, so they are not correct choices.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 128) What fraction of U.S. employees do personal website surfing every day?

A) less than one-quarter B) slightly less than half C) more than half D) almost all Answer: C Explanation: C) A recent survey indicated that over 50 percent of employees did personal web surfing on the Internet every day, making "more than half" the correct response.

Diff: 2 Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 129) Annual losses from organizational theft and fraud amount to about ________ per worker.

A) $500 B) $2500 C) $4500 D) $6000 Answer: C Explanation: C) Shockingly, the losses from workers taking equipment, software and supplies and filing false expense reports come to about $4500 per person per year, making that choice the correct response and ruling out all other responses. These abuses include everything from loading company software on home computers to stealing a copy machine from a store room.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4

Learning Outcome: Discuss the role of ethics and social responsibility in management

130) An effective feedforward strategy for dealing with employee theft is ________.

A) screen workers before they are hired B) openly state the real costs of stealing C) have managers set good examples D) hire professional investigators Answer: A Explanation: A) Though stating costs and setting good examples may be helpful, these are concurrent, not feedforward, measures so they are incorrect responses.

Hiring investigators is a feedback response, so is an incorrect response. Of the choices given, only prescreening workers is a feedforward strategy, so "screen workers before they are hired" is the correct response.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 131) An effective concurrent strategy for dealing with employee theft of supplies and equipment is ________.

A) establish theft policies B) redesign all control measures C) "lock-out" options on electronic devices D) video surveillance Answer: D Explanation: D) Though establishing theft policies and redesigning all control measures may be helpful, these are not concurrent measures, so they are incorrect responses. "Lock-out" options would work for electronic crimes, but not theft of material equipment, so this choice is not a correct response. Of the choices given, only video surveillance would be a deterrent to stealing tangible material equipment and supplies, so "video surveillance" is the correct response for this question.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management

132) All of the following are common rationalizations that workers use to justify workplace theft EXCEPT ________.

A) "Everyone does it."

B) "They'll never miss it."

C) "I deserve this."

D) "I owe money from gambling."

Answer: D Explanation: D) The three incorrect choices are commonly heard rationalizations that people use to justify stealing from large organizations. They make sense and sound plausible, but they do not in any way morally or legally justify theft. Owing gambling money, on the other hand, is not an after-the-fact rationalization but rather an actual reason for stealing—the person needs the money—making that choice the correct response. Note that though this choice provides a reason for stealing, it still doesn't in any way justify stealing in a moral or legal sense.

Diff: 2 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 133) In any given week, about ________ workers are attacked by coworkers or former coworkers and seriously injured.

A) 1 percent of all B) 10 C) 25 D) 100 Answer: C Explanation: C) Every year, about 1300 workers are assaulted by current or former coworkers and seriously injured. This comes out to about 25 of these incidents per week, making "25" the correct response and ruling out the other responses.

Diff: 2 Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 134) Workplace violence is most likely to occur in ________.

A) open organic workplaces B) functional workplaces C) dysfunctional workplaces D) both functional or dysfunctional workplaces—violence shows no pattern Answer: C Explanation: C) Functional and organic workplaces are unlikely sites for violence.

Violence tends to occur in rigid, high-pressure, abusive dysfunctional workplace atmospheres in which employees are shown little respect and have little power over their own activities, making "dysfunctional workplaces" the correct response. Note that "both functional or dysfunctional workplaces" is incorrect because violence does have a greater probability in dysfunctional locales.

Diff: 2 Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in

management 135) In a short essay, define and describe the management function of control.

Answer: Control is the process of monitoring organizational activities and making sure that they are being done correctly and successfully. The typical control process has managers evaluate work performance and compare actual performance outputs to performance standards. These standards are typically the goals set by management during the planning process.

If the actual performance measures up favorably to the standards, managers do little or nothing to change the course of action. If performance fails to fall within acceptable standards, managers take corrective action to make sure tasks are performed satisfactorily. The effectiveness of control is seen in goals. The better the control function is, the more likely that organizational goals will be successfully met.

Diff: 3 AACSB: Analytic thinking Objective: 14.1 Learning Outcome: Describe the components of the control process 136) In a short essay, explain why what managers choose to measure can be more important than how they measure in the control process.

Answer: A premium coffee bean company, for example, may choose to measure total sales in a given geographical region as a reflection of how well the company is doing.

This company might see rising sales of its product as a sign that it is highly successful in this geographical region.

However, the sales totals may not tell the whole story. If premium coffee in the geographical area is a rapidly expanding market, the sales of all premium coffees would be expected to be rising. It is possible that the company is actually losing market share to a competitor even as its total sales rise impressively.

Thus, in this case, deciding what to measure—market share as opposed to total sales —may make a huge difference in how the company evaluates its performance. If it measures total sales, it sees its performance as good. If it measures market share, it may see its performance as worrisome.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

137) In a short essay, describe the first step in the control process.

Answer: The first step in the control process is measuring, or determining, the actual performance of an individual or an organization. Basic job performance for most jobs can be measured in simple, objective, and easily quantifiable terms. However, to get a deeper and more meaningful analysis, managers frequently employ a variety of methods to gauge performance, such as personal observation, statistical reports, oral reports, and written reports. For most managers, using a combination of approaches increases the probability of getting meaningful and reliable information.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 138) In a short essay, describe the second step in the control process.

Answer: Comparing is the second step in the control process. Comparing involves taking the data from the measurement stage of the control process and comparing it to a standard. Typically, the standard is a performance goal set during the planning process.

Variation between actual performance and the prespecified standard is to be expected.

How much variation is acceptable is what managers must determine by identifying an acceptable range of variation. Performance outside this range is deemed unacceptable and merits a response or corrective action of some type. Performance within the acceptable range of variation typically requires no action at all on a manager's part.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 139) In a short essay, describe the third step in the control process.

Answer: The third step in the control process involves taking managerial action.

When actual performance falls outside an acceptable range of deviation, managers must somehow fix the situation. Generally, managers can choose among three possible courses of action: do nothing, correct the actual performance, and revise the standards.

Managers choose to do nothing when performance measures up favorably to standards. Managers choose corrective action when performance does not measure up.

Examples of corrective actions might include changing strategy, structure, compensation plans, or training programs; redesigning jobs; and firing employees.

Revising standards is an appropriate response if the variance was the result of unrealistic, erroneous, or unreasonable expectations. Standards can be faulty, especially when the situation changes. During boom times, managers sometimes adjust standards up. During times of trouble, such as recessions, managers may revise standards downward.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

140) In a short essay, explain how managers determine what a significant deviation is.

Answer: Significant deviations from an acceptable range of variance are entirely up to the manager him- or herself to determine. In some cases, goals may be technically met, but a manager will still feel that some kind of corrective action needs to be taken.

A manager of a gelato store, for example, might look at monthly sales totals and see that hazelnut gelato performed well below its goal. The manager might greet this finding in more than one way. She might decide to terminate the sale of this flavor and move on to develop a new flavor. She might decide that hazelnut simply needs more time and exposure to the public and its sales will pick up, eliciting a "sit tight" and do nothing response. Or, she might decide that hazelnut simply needs some extra promotion to increase sales—posters, free samples, special prices, etc.

The point of the preceding shows that the interpretation of performance data lies entirely in the eye of the manager who is observing it. One person's acceptable deviation might be another person's unacceptable deviation.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process 141) In a short essay, explain the difference between immediate corrective action and basic corrective action.

Answer: Immediate corrective action is action that a manager takes to fix a problem in the short term to get performance on track. An example of taking immediate corrective action would include a building contractor hiring extra carpenters when the people he has on the job aren't working fast enough.

Basic corrective action goes beyond fixing the problem at hand and attempts to find— and correct—the underlying causes of the problem. For example, there might be a number of reasons why a building project gets behind schedule: not enough labor, having to wait for materials, conflicts in scheduling, inefficient workers or supervision, and so on. Getting to the bottom of the situation can save managers time, trouble, and money. For example, rather than hire (expensive) extra carpenters on a building project, a manager might learn that he simply needs to schedule the current workers better and the problem will be solved.

Diff: 3 AACSB: Analytic thinking Objective: 14.2 Learning Outcome: Describe the components of the control process

142) In a short essay, describe feedforward control and give an example of its use.

Answer: Feedforward control is the most desirable type of control because it heads off problems before they actually occur. Feedforward control is any controlling activity that takes place before problematic behaviors are likely to occur.

An example of feedforward control occurs when sports venues ban the sale of alcohol during certain events that are likely to result in fighting or similar incidents. By eliminating a factor that always exacerbates and is sometimes the primary cause of violence ahead of time, managers avoid the trouble that violence brings.

Diff: 3 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 143) In a short essay, describe concurrent control and give an example of its use.

Answer: Concurrent control, as its name implies, takes place while an activity is in progress. Direct supervision is the best-known form of concurrent control. A good example of a company using concurrent control to increase profits is done by Google.

Each time a user clicks on a Google ad, the click is registered and reflected in the data that Google collects. If the ad is unsuccessful, Google can report back to the sponsor quickly to change the ad's placement or composition.

Diff: 3 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process 144) In a short essay, describe feedback control and give an example of its use.

Answer: The most popular type of control relies on feedback. In feedback control, the control takes place after the activity is done. Feedback control tells managers about the effectiveness of their planning effort and can provide information that enhances employee motivation.

Any performance measurement for a company is an example of feedback control.

Plans are made and standards are set. Those standards are compared to actual sales totals. If sales totals and standards generally agree, managers consider their plans accurate and their performance successful. If standards and totals do not agree, managers can take action to remedy the situation.

Diff: 3 AACSB: Analytic thinking Objective: 14.3 Learning Outcome: Describe the components of the control process

145) In a short essay, explain how global companies compare to domestic companies with respect to controlling workers.

Answer: In general, in a global company, the greater the distance between the home country and the local branch, the more the corporate office feels the need to use formal monitoring methods. These formal monitoring methods may include requiring formal reports to be made and using technological means to monitor employee behavior. For example, Seven and i Holdings, a Japanese conglomerate, uses computer monitoring to do such things as measure sales, keep track of inventory, and schedule tasks for workers.

Diff: 3 AACSB: Communication abilities Objective: 14.3 Learning Outcome: Identify the fundamental concepts and issues of international business and management 146) In a short essay, describe workplace privacy concerns for managers today. What are managers doing to control this issue?

Answer: Employers can (and do), among other things, read employee email, tap telephones, and monitor computer use. This may sound like an illegal invasion of privacy, but in the workplace, the employer in a sense "owns" the worker's time and has a right to make sure that it is not wasted or abused.

Recreational on-the-job Web surfing is thought to cost billions of dollars in lost work productivity annually, and employers have a right to try to minimize those losses.

Employers also monitor employee email to provide unambiguous evidence for discrimination and sexual harassment cases. Finally, companies monitor computer use to ensure that company secrets aren't being leaked either deliberately or inadvertently.

Although employees may think that it's unfair for a company to monitor their work electronically, the courts have ruled that since the computer belongs to the company, managers have a right to view everything on it. Because of all of the serious issues listed above, many companies are developing and enforcing workplace monitoring policies. There should be a balance between management's need to know and the effect employee monitoring may have on employee morale.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management

147) In a short essay, explain why employers feel the need to monitor employee behavior.

Answer: First and foremost, employers are concerned about the amount of time wasted by employees using the Internet for their own private interests. These interests can range from a quick check of a stock price to an employee watching a game or a movie during work hours. The second reason that employers monitor is to avoid situations in which sexual harassment or a hostile work environment arises through emails or blog and social network postings. Third, employers monitor to make sure that company secrets aren't being leaked either deliberately or inadvertently.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management 148) In a short essay, describe one feedforward, one concurrent, and one feedback method for controlling employee theft.

Answer: A feedforward method for controlling employee theft might be to spell out specific policies for theft to make sure that employees don't mistake "helping themselves" to company resources as acceptable. A concurrent method for controlling employee theft would be to install video security cameras. A feedback method for controlling employee theft would be to broadly publicize any theft incidents (without naming names) to make sure that all employees are aware that the company is paying close attention to employee thefts.

Diff: 3 AACSB: Ethical understanding and reasoning abilities Objective: 14.4 Learning Outcome: Discuss the role of ethics and social responsibility in management Fundamentals of Management, 9e (Robbins) Chapter 15 Operations Management 1) The goal of operations management is to manage the process of turning labor and raw materials into goods and services of some type.

Answer: TRUE Explanation: Operations management is the act of controlling and managing the process that turns inputs, such as raw materials, labor, and equipment, into products that customers buy.

Diff: 1 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 2) Operations management is part of the transformation process.

Answer: FALSE Explanation: The opposite is true—the transformation process is part of operations management. Operations management is how you manage, control, and apply the transformation process.

Diff: 2 Objective: 15.1

Learning Outcome: Discuss the functions and tools of operations management 3) The three inputs in the transformation process are people, equipment, and materials.

Answer: FALSE Explanation: In addition to people, equipment, and materials, the inputs include capital, technology, and information.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 4) Operations management includes service industries but not manufacturing firms.

Answer: FALSE Explanation: Operations management includes both service and manufacturing industries.

Diff: 1 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 5) When inputs are turned into goods and services, value is created.

Answer: TRUE Explanation: By definition, the transformation process creates value when it transforms inputs into goods and services that customers want to buy.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

6) Manufacturing organizations produce both physical and nonphysical outputs.

Answer: FALSE Explanation: Manufacturing organizations produce physical outputs only. A car company, for example, produces cars.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 7) The majority of U.S. companies still produce goods rather than services.

Answer: FALSE Explanation: Currently, 77 percent of U.S. economic activity is directed toward producing services.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 8) For most U.S. companies, high productivity is a matter of survival.

Answer: TRUE Explanation: Productivity not only increases profits for companies, in most cases it makes the difference between surviving and not surviving. Highly productive companies thrive; others usually fall by the wayside.

Diff: 2 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 9) According to W. Edwards Deming, managers should emphasize short-term rather than long-term planning.

Answer: FALSE Explanation: Deming prescribed the opposite—all planning should keep the longterm future in mind.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 10) Deming advocated an approach in which managers never get complacent about the quality of their product.

Answer: TRUE Explanation: Deming claimed that the effort to attain quality was never-ending. No matter how good your product is, you always need to be on the lookout for improvements.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management

11) Productivity goals, according to Deming, should be strictly numerical to avoid ambiguity.

Answer: FALSE Explanation: Though nonnumerical goals can sometimes be subject to misinterpretation, Deming thought that they were necessary for a productive organization.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 12) Deming's 14 points were useful in their time but are now largely considered to be obsolete.

Answer: FALSE Explanation: Deming's 14 points have withstood the test of time and are still followed by managers today.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 13) Beginning in the 1950s, U.S. firms began to focus on manufacturing rather than finance and marketing.

Answer: FALSE Explanation: The opposite is true—after World War II, U.S. managers felt that they had solved all production problems and began to focus on finance and marketing rather than manufacturing.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 14) In the 1960s and 1970s, companies in Japan and Germany began to catch up with U.S. firms by focusing on quality.

Answer: TRUE Explanation: Japanese and German firms built modern manufacturing facilities and began focusing on quality. Their efforts eventually met with great success.

Diff: 2 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 15) Operations management is likely to play a key role in American firms regaining their preeminence among world companies.

Answer: TRUE Explanation: Operations management, the control of the process that transforms inputs into goods and services, is key to success in today's competitive business world. If American companies regain dominance, operations management is likely to have contributed substantially to their success.

Diff: 2 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 16) Value in a value chain management system is determined by managers.

Answer: FALSE Explanation: Value is determined by customers, not managers. Any feature of a product that customers are willing to pay to have is considered value. If customers are willing to pay more for a red bicycle than an identical blue bicycle, then the color red has value.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 17) Each link in a value chain adds an equal amount of value to a product.

Answer: FALSE Explanation: Different steps can add different amounts of value. Cutting a diamond adds an enormous amount of value to the diamond. Mounting the diamond also adds value but not as much as cutting. Putting the diamond in a nice box adds even less value.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 18) Value chain management is externally oriented.

Answer: TRUE Explanation: Value chain management focuses on both incoming resources to the organization and outgoing products. This contrasts with supply chain management, which focuses on incoming resources only.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 19) Value chain management is efficiency oriented.

Answer: FALSE Explanation: Value chain management is effectiveness oriented, not efficiency oriented. The priority in value chain management is to get the right product that customers want, not the most efficiently made product.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 20) Productivity is not important to value chain management.

Answer: FALSE Explanation: Though value chain management is more effective than efficiency oriented, productivity is still important. For example, customers may want a great pair of sneakers, but they also want the sneakers to have a reasonable price. Thus, steps along the value chain that can increase productivity and therefore keep the price low add value—a selling point—to the customer.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 21) Customers played a role in IKEA's success by being willing to pay higher prices for high-quality furniture.

Answer: FALSE Explanation: IKEA customers were not willing to pay higher prices. They defrayed some of the cost of the furniture by transporting it and putting it together themselves.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 22) Sharing information is part of the coordination and collaboration requirement for successful value chain management.

Answer: TRUE Explanation: Coordination and collaboration require members of the value chain to be flexible and share information.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 23) The customer is part of the value chain in value chain management.

Answer: TRUE Explanation: The customer is the most important part of the value chain because it is the customer who ultimately determines value for every part of the chain.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 24) Organizational processes in value chain management refer to how work is done.

Answer: TRUE Explanation: Organizational processes describe the steps that make up the entire value chain, from the first input to the final product.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 25) In value chain management, activities are eliminated from the organizational process if they do not add value to the process.

Answer: TRUE Explanation: At each step of the organizational process, managers ask, "How is value being added here?" If value is not being added, the step is eliminated.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

26) The goal of value chain management is to meet, but never to exceed, the needs and desires of customers.

Answer: FALSE Explanation: The goal of value chain management is both to meet and to exceed the needs and desires of customers.

Diff: 1 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 27) Value in value chain management is driven exclusively from the top down.

Answer: FALSE Explanation: Value is thought to be driven from two directions—from the top down and from the bottom up.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 28) Being rigorous about expectations is a key part of leadership in value chain management.

Answer: TRUE Explanation: Leaders in value chain management must communicate to all parts of the chain that expectations are key. For example, managers at American Standard ended up eliminating many of its suppliers when it found they couldn't meet ambitious expectations.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 29) Employees in a value chain management organization must be flexible.

Answer: TRUE Explanation: Flexibility is the key to job performance in a value chain management system. Employees need to learn to let go of rigid ideas that define their jobs and learn to do whatever adds value to the product.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 30) Trust is so important in value chain management that proponents of the system say you can never have too much trust.

Answer: FALSE Explanation: In fact, trusting too much can be a big problem in value chain management when it allows intellectual property to be appropriated. Employees in a shared environment must learn to protect their assets.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

31) Partners in a value chain management system need to be able to both learn from and educate other partners in the value chain.

Answer: TRUE Explanation: Partners in the value chain often switch roles. They may learn from one partner and turn around and play the role of teacher with a second partner. Those roles could also switch at a later date.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 32) One place in which technology has little impact is the fast-food restaurant business.

Answer: FALSE Explanation: Companies are using technology to do all sorts of things to improve productivity in fast-food restaurants. For example, one company used computers to count cars in drive-through lanes and subsequently used the information to anticipate demand from the cars in line.

Diff: 2 AACSB: Use of information technology Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 33) Many experts believe that for firms to compete globally they must focus solely on the quantity of production and reducing costs.

Answer: FALSE Explanation: This statement is false because many firms in the global marketplace do well focusing on quality rather than the quantity of what they produce.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 34) Product quality and service quality are two different things.

Answer: TRUE Explanation: The two types of quality are evaluated differently. Product quality has eight different dimensions. Service quality has six different dimensions.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 35) ISO 9000 certification provides proof that a quality operations system is in place in a facility.

Answer: TRUE Explanation: ISO certification has been awarded in 175 different countries and is recognized the world over as a measure of quality.

Diff: 1 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 36) In the Six Sigma system, the higher the sigma value, the greater the number of

defects you would expect from a product.

Answer: FALSE Explanation: The opposite is true—a high sigma value signifies a low, not a high, number of defects.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 37) To find the planned duration of a project on a Gantt chart, simply look at the width of the bar that represents actual progress.

Answer: FALSE Explanation: The width of the bar that represents the goal shows the planned duration of the project, not the actual progress bar.

Diff: 3 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 38) A load chart can tell you how many workers are busy at a given point in time.

Answer: TRUE Explanation: Reading down on the sample load chart in the chapter reading, for example, shows times when all workers are occupied (at the end of month 4) and when fewest workers are occupied (during week 3).

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 39) The critical path in a PERT network is the least time-consuming sequence required to complete a project in the shortest period of time.

Answer: FALSE Explanation: The critical path in a PERT network is the most, not least, timeconsuming sequence required to complete a project in the shortest period of time.

Diff: 2 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

40) ________ management oversees the transformation process that converts resources such as labor and raw materials into finished goods and services.

A) Control B) Operations C) Systems D) Planning Answer: B Explanation: B) Operations management is defined as the process that oversees every step of the transformation process, making "operations" the correct response and ruling out the other responses. The transformation process is what turns material and nonmaterial inputs into goods and services, so operations management is the management of this process that converts raw inputs into finished product outputs.

Diff: 1 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 41) The purpose of operations management is to manage ________.

A) inputs B) outputs C) the transformation process D) the manufacturing process Answer: C Explanation: C) Operations management is the management of the transformation process, the process that turns inputs, such as people and materials, into outputs, such as goods and services. Since inputs and outputs are part of the transformation process, they are only partial answers for this question. Similarly, the manufacturing process is part of the transformation process, so it is not a correct response for this question.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 42) The transformation process transforms ________.

A) goods and services into products B) inputs into services only C) materials into goods only D) inputs into goods and services Answer: D Explanation: D) The transformation process takes inputs of various types, including materials, equipment, people, technology, capital, and information, and turns them into products, that is, goods and services, making "inputs into goods and services" the correct response. The process clearly ends, rather than begins, with goods and services, making "goods and services into products" an incorrect choice. The remaining two choices are incorrect because the transformation process includes both goods and services and is not limited to either output.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 43) Value is created during the process of ________.

A) inputs being converted into outputs

B) inputs being stored C) outputs being measured D) operations being controlled Answer: A Explanation: A) During the transformation process, value is created when inputs— such things as knowledge, capital, and raw materials—are turned into finished products, or outputs, making "inputs being converted into outputs" the correct response and ruling out all other choices. A raw material such as petroleum, for example, gains value after it has been transformed into gasoline. Value itself is defined as something that customers will pay for, or give up some other resource for.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 44) Inputs in the transformation process include ________.

A) physical, material substances only B) both material and nonmaterial items C) nonmaterial items only D) equipment and materials only Answer: B Explanation: B) Inputs can include any material or nonmaterial item that contributes to the transformation process, making "both material and nonmaterial items" the correct response. "Physical, material substances only" and "equipment and materials only" are wrong because they are limited to material items, while "nonmaterial items only" makes the opposite mistake, failing to include any material items.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 45) All organizations produce goods or services through the ________ process.

A) transformation B) service C) manufacturing D) operations Answer: A Explanation: A) The transformation process includes sequences that produce both material goods and nonmaterial services, making "transformation" the correct response. Service and manufacturing are limited to either one or the other, the manufacturing or service process, so they are not correct responses since they don't include all organizations. "Operations" is incorrect because the operations process is not a recognized process in this context.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

46) As a product, piano lessons are ________.

A) a good because you can purchase them B) a service because they are nonmaterial C) a good because they can be divided into discrete lessons D) a service because someone needs to give them Answer: B Explanation: B) Goods are physical, material objects and services are nonmaterial, nonphysical objects. Being able to purchase or subdivide piano instruction into individual lessons does not make them physical, material objects. Being "given" also does not make piano lessons a service because plenty of nonmaterial things are given.

The correct response for this question is "a service because they are nonmaterial" because it identifies piano lessons as being a nonmaterial service.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 47) In a transformation process, people are considered to be inputs because they ________.

A) are material beings B) are costly C) perform tasks that are needed to create outputs D) have knowledge and information Answer: C Explanation: C) What makes people qualify as inputs in the transformation process is not that they are costly or are material beings. Some inputs, such as information, for example, are nonmaterial, so being material is not a necessary characteristic of an input. The fact that people have knowledge and information also does not qualify them as inputs. People are inputs only because they use that knowledge and information to perform tasks that turn goods and services into outputs, making "perform tasks that are needed to create outputs" the correct response. People are inputs because they help the transformation process transform raw inputs into finished products.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

48) It is easier to see the transformation process at work in manufacturing organizations than in service organizations because manufacturing organizations ________.

A) produce goods and services B) turn inputs into outputs C) turn inputs into physical and nonphysical products D) produce physical goods Answer: D Explanation: D) "Produce goods and services" and "turn inputs into physical and nonphysical products" are both untrue because manufacturing organizations produce tangible, physical goods only, not services or nonphysical products. All organizations that carry out transformation processes turn inputs into outputs, so "turn inputs into outputs" is not a correct response. "Produce physical goods" is the correct response because it identifies the key characteristic of manufacturing organizations—they produce material, physical products that are easy to identify as outputs.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 49) Service organizations ________.

A) produce physical and nonphysical outputs B) produce physical outputs only C) require nonphysical inputs only D) produce nonphysical outputs only Answer: D Explanation: D) Service organizations produce service, a nonphysical product or output, making "produce nonphysical outputs only" the correct response.

Manufacturing organizations are the organizations that produce physical, material products, which rules out "produce physical and nonphysical outputs" as well as "produce physical outputs only." While service organizations produce nonphysical products, they do not necessarily require nonphysical inputs. Such things as information and effort are inputs that are routinely used to create service as an output, for example.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

50) Manufacturing organizations ________.

A) produce physical outputs only B) produce nonphysical outputs only C) require nonphysical inputs only D) require physical inputs only Answer: A Explanation: A) Manufacturing organizations produce recognizable, physical products as outputs, making "produce physical outputs only" the correct response.

Service organizations, on the other hand, produce nonphysical services as products, which rules out "produce nonphysical outputs only." While manufacturing organizations produce physical products, they use both physical or nonphysical items as inputs. For example, a manufacturing organization that makes toys uses both physical materials (plastic, metal) and nonphysical things (ideas, designs, effort) to make its physical products.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 51) Which of the following is NOT an example of a service organization?

A) a military force B) a university C) a lens maker D) a hospital Answer: C Explanation: C) The products or outputs of a hospital (care), a military force (protection), and a university (knowledge) are all nonphysical entities, making these organizations service organizations. A manufacturer of lenses, on the other hand, is creating tangible, physical objects as output, so it is not a service organization, making "a lens maker" the correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 52) It is estimated that in the United States, about ________ of all economic output is toward making tangible, physical objects.

A) 10 percent B) 20 percent C) 40 percent D) 80 percent Answer: B Explanation: B) Almost 80 percent of economic activity is service related, which leaves about 20 percent of companies that are creating tangible goods of some type, making "20 percent" the correct response and ruling out all other responses.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

53) A bus company is a ________ organization because its product is ________.

A) service; buses B) manufacturing; transportation C) service; transportation D) manufacturing; buses Answer: C Explanation: C) A bus company does not make a physical product, so it is not a manufacturing organization, eliminating the two manufacturing choices as correct responses. The product of a bus company is not buses but transportation for people, so "service; transportation" is the correct response and "service; buses" is incorrect.

Diff: 3 AACSB: Analytic thinking Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 54) You would expect a highly developed country like ________ to have a predominantly ________ economy.

A) France; manufacturing B) France; service C) Vietnam; service D) United Kingdom; manufacturing Answer: B Explanation: B) In general, highly developed countries such as France, the United States and the UK have service economies, making "France; service" the correct response and eliminating "UK; manufacturing." Undeveloped countries, like Vietnam, have a manufacturing economy.

Diff: 2 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 55) A laptop computer company is a ________ organization because its product is ________.

A) service; electronic B) manufacturing; electronic C) service; a computer D) manufacturing; a computer Answer: D Explanation: D) A computer company takes raw materials and makes a physical product, a computer, so it is a manufacturing organization, making "manufacturing; a computer" the correct response. "Service; electronic" and "service; a computer" can be ruled out because they identify the company as a service organization, which is not true since it makes a physical product. "Manufacturing; electronic" is incorrect because the company's product is a computer, not an electronic product.

Diff: 2 AACSB: Analytic thinking Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

56) You would expect an undeveloped country like ________ to have a predominately ________ economy.

A) Laos; nonservice B) Laos; service C) Australia; manufacturing D) Belgium; nonservice Answer: A Explanation: A) In general, undeveloped countries like Laos and Vietnam have nonservice, manufacturing economies, making "Laos; nonservice" the correct response and eliminating "Laos; service." Australia and Belgium have highly developed economies, so the remaining two choices are eliminated.

Diff: 2 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Identify the fundamental concepts and issues of international business and management 57) In the ever more difficult struggle to survive in a competitive world, Evans Findings Company has a work shift with ________.

A) extra employees to increase productivity B) no employees to allow workers to rest C) no employees to punish unproductive workers D) no employees to increase productivity Answer: D Explanation: D) Paying employees is an expensive part of doing business for a manufacturing organization, so Evans operates a workerless shift to lower labor costs and increase productivity, making "no employees to increase productivity" the correct response and ruling out the other three choices.

Diff: 2 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

58) Most countries in today's global business climate see ________ as the key to success.

A) maintaining productivity B) increasing productivity C) higher wages D) shorter working hours Answer: B Explanation: B) Though companies in most nations would love to give out high wages and shorten working hours, they can only do this if they are able not just to maintain current productivity levels but to actually increase productivity as time passes. Increased productivity is seen as the key to all good things—higher profits, higher wages, lower inflation, and ultimately more employee satisfaction.

Diff: 1 AACSB: Dynamics of the global economy Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 59) McDonald's recently made productivity gains by cutting the ________.

A) wages of workers B) weight of an order of French fries C) time workers were trained D) time it takes to make French fries Answer: D Explanation: D) Cutting training time for workers might actually decrease, rather than increase, productivity, so "time workers were trained" is an incorrect response.

Cutting wages or portion size of French fries might increase productivity, but there is no evidence that McDonald's did this. There is evidence to show that McDonald's cut the time it takes to make French fries, making this choice the correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 60) Which of the following is NOT a way to increase productivity?

A) increase inputs B) decrease costs C) increase outputs D) increase efficiency Answer: A Explanation: A) Increasing efficiency is an effective way to increase productivity.

Decreasing costs and increasing outputs are ways to increase efficiency, so both also increase productivity. Increasing inputs usually decreases efficiency since efficiency is defined as the ratio of outputs to inputs, so "increase inputs" is the correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management

61) W. Edwards Deming thought that ________ the key to productivity.

A) workers were B) controlling costs was C) managers were D) both managers and workers were Answer: C Explanation: C) Deming's thinking on productivity was clear. Though workers and such things as controlling costs were important, the real key to productivity were managers because they were the ones who could do such things as control costs and get workers to function more efficiently and effectively. This makes "managers" the correct response and eliminates "both managers and workers" as a correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 62) With respect to planning, Deming believed that ________ was most important for productivity.

A) short-term planning B) long-term planning C) medium-term planning D) flexible planning Answer: B Explanation: B) Deming felt that looking way ahead to the long-term future was one of the 14 keys to productivity. Though other forms of planning were important, the long view was critical to Deming, making "long-term planning" the correct answer and eliminating the other choices.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 63) With respect to product quality, Deming believed that a company should never ________.

A) pay more attention to quality than to price B) be satisfied with its current level of quality C) try to fix a product if it "ain't broke" D) put quality ahead of profits Answer: B Explanation: B) Deming's most compelling thoughts on product quality warned companies about getting complacent with respect to quality, making "be satisfied with its current level of quality" the correct response. This effectively rules out the other three choices as all three diminish the primacy of quality and fail to warn about complacency.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management

64) Deming was a strong believer in keeping accurate statistics and advocated ________ goals.

A) strictly nonnumerical B) strictly numerical C) both numerical and nonnumerical D) both numerical and statistical Answer: C Explanation: C) Deming felt that numerical goals were important but they should be combined with nonnumerical goals, making "both numerical and nonnumerical" the correct response. "Strictly nonnumerical" can be ruled out because it does not include numerical goals, while "strictly numerical" fails to include nonnumerical goals. "Both numerical and statistical" is not correct because numerical and statistical goals are largely the same thing.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 65) Of all the emotions that affect a workplace, Deming felt that ________ was most important for increasing productivity.

A) making workers fear failure B) eliminating fear C) making employees happy D) eliminating anger Answer: B Explanation: B) Though getting rid of anger and promoting happiness most likely have an effect on productivity, Deming felt that eliminating fear was key to productivity, making this choice the correct response. "Making workers fear failure" can be ruled out because instead of getting rid of fear it essentially advocates fear.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 66) Deming felt that ________ with statistics.

A) employees should be capable of dealing B) employees should not be asked to deal C) managers only should deal D) employees only should deal Answer: A Explanation: A) Deming felt that employees should not shy away from statistics and that they should be able to handle the statistics that their jobs entailed, making "employees should be capable of dealing" the correct response and ruling out "employees should not be asked to deal." Though Deming felt that employees needed to deal with statistics, he did not think that employees only or managers only should exclusively handle statistical matters.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management

67) Deming felt that doing quality work was this.

A) a job requirement B) a goal C) a standard to strive toward D) optional for most jobs Answer: A Explanation: A) Deming did not consider doing quality work to be optional or a goal or standard that employees should seek but may or may not attain. Instead, Deming felt that quality work was an essential requirement that employers should demand of their employees, making "a job requirement" the correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 68) Deming felt that any new skills that employees needed should be acquired ________.

A) when they are hired and trained B) by the employees on their own C) when the need arises D) years ahead of time Answer: C Explanation: C) Rather than have employees pick up new skills ahead of time, during training, or on their own, Deming felt that skills should be taught as the need arose so the training would be fresh in the employee's mind and could be put into practice immediately. This makes "when the job required it" the correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 69) Since Deming first proposed his 14 points for improving productivity, his prescriptions have ________.

A) been largely discredited B) fallen into disuse C) been confirmed repeatedly D) been confirmed for U.S. workers only Answer: C Explanation: C) Rather than be discredited or fall into disuse, Deming's 14 points have withstood the test of time and are now thought to be the standard method for improving productivity, making "been confirmed repeatedly" the correct response.

Deming's work began in Japan and its success is not limited to the United States, so "been confirmed for U.S. workers only" is not a correct response.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management

70) Where did the modern era of manufacturing primarily begin?

A) the coal industry B) Detroit automobile factories C) southern cotton plantations D) northeastern textile mills Answer: B Explanation: B) Though the textile mills of New England helped usher in the Industrial Revolution, they are not thought to be as important to manufacturing as Detroit's auto factories, making "Detroit automobile factories" the correct response.

Southern plantations and coal mines were not actually manufacturing facilities, so they do not qualify as watershed industries.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 71) After World War II, U.S. managers made the mistake of thinking that ________.

A) production problems were solved B) marketing problems were solved C) finance problems were solved D) marketing problems were not solved Answer: A Explanation: A) The mistake that U.S. managers made was to think that production didn't matter—assembly lines and other innovations from previous decades would take care of productivity, so managers should focus on marketing and finance. This explains why the three incorrect choices are incorrect because they all deal with marketing or finance and the real mistake that managers made was to ignore production, making "production problems were solved" the correct response.

Diff: 2 AACSB: Use of information technology Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management 72) In the 1960s and 1970s, many U.S. manufacturers fell behind because they ignored production issues and focused on ________.

A) quality and efficiency B) marketing and finance C) efficiency and customers D) finance and quality Answer: B Explanation: B) While U.S. firms focused on marketing and finance, foreign companies, especially the Japanese, focused on quality and efficiency, making "marketing and finance" the correct response and ruling out "quality and efficiency" as the correct response. The remaining two choices are incorrect because they fail to identify both marketing and finance.

Diff: 2 Objective: 15.1 Learning Outcome: Summarize the major historical and current approaches to management

73) Managers in the United States today see this as the path to establishing and maintaining global leadership.

A) reducing costs B) increasing production C) operations management D) scientific management Answer: C Explanation: C) Operations management—managing the transformation process from inputs to outputs every step of the way—is where managers of successful companies are investing their efforts in today's business climate, making "operations management" the correct response. Reducing costs and increasing production are just parts of the story that operations management encompasses, so they are not correct responses. Scientific management is not a term that is in common use with today's managers.

Diff: 2 Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 74) Value is any aspect of a product that customers ________ in the product.

A) like or admire B) want to see C) will pay for D) notice Answer: C Explanation: C) The key to value is that it is not simply something that customers notice, admire, or would like to have in a product. Value is something that customers are willing to pay for in one way or another, either with money or some other resource. This makes "will pay for" the correct response.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 75) The durability an expensive pair of shoes provides has value since ________ are willing to ________ it.

A) suppliers; provide B) customers; pay for C) manufacturers; make D) managers; plan for Answer: B Explanation: B) The views of suppliers, manufacturers, and managers are not important when it comes to value. Value is entirely customer-defined. If customers are willing to pay for a feature, then that feature has value. This makes "customers; pay for" the correct response.

Diff: 2 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

76) On eBay, brand-new red espresso machines from Francis Francis routinely sell for $50 more than identical white machines. What can you conclude?

A) The color white has no value.

B) The color red has value.

C) Color has no value since it does not add to the function of the machine.

D) There is something different about the red machines.

Answer: B Explanation: B) The fact that customers are willing to pay more for the color red, even though the two machines are otherwise identical, shows that the color red has value, making that choice the correct response. The color white may also have value; for example, it may sell for more than a black machine, making "the color white has no value" an incorrect response. "Color has no value" is incorrect because the actual function of a feature doesn't matter. The only thing that matters is that people will pay more for that feature. "There is something different about the red machines" is wrong because there is no evidence provided that it is true.

Diff: 3 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 77) When the New York Times experimented with charging money for its online news source, its popularity on the Internet plummeted. This shows that online news, at least as it is defined in this market, has ________.

A) enormous value B) no value C) no appeal D) little value Answer: D Explanation: D) The experiment with charging for Internet news showed that though millions of customers were eager to read the Times for free, few were willing to pay for that service, meaning that the news as presented had little value. This makes "little value" the correct response and rules out all other responses. Note that the value of the news must be taken in context. People were unwilling to pay for the news not, according to the Times, because they didn't appreciate it, but because there were so many free options, it didn't seem worth it to pay for what they could get for nothing.

Diff: 3 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

78) The ________ is the series of work actions that add value to a product as it is being transformed from inputs to finished product.

A) supply chain B) value chain C) output chain D) input chain Answer: B Explanation: B) A value chain is defined as the series of steps that each add value to a product as it is being made. For example, choosing fine wood adds value to furniture as it is being made and so does the workmanship of the people who build the item. A supply chain is concerned primarily with manufacturers having the proper flow of materials and equipment when they make a product, not adding value to the product.

Output and input chains are not recognized terms.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 79) In its entirety, the value chain can encompass the supplier's ________ to the customer's ________.

A) customers; suppliers B) customers; customers C) suppliers; suppliers D) suppliers; customer Answer: D Explanation: D) This statement takes the value chain for a given company beyond the limits of the company itself. For example, the tractors used by Starbucks coffee growers in Guatemala are suppliers of suppliers. Clients of a design firm who enjoy Starbucks coffee during a meeting are customers of customers. This situation clearly describes "suppliers; customers" as the only answer that makes sense for this question.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

80) ________ is the process of managing the sequence of activities and information along the entire value chain for a product.

A) Supply chain management B) Value chain management C) Supply management D) Customer management Answer: B Explanation: B) Value chain management is the control of the entire value chain (both inputs and outputs), adding value as defined by customers during each step of the process. For example, the snowplow operator who salts and scrapes the road is adding value to a ski resort by allowing customers to reach the resort after a heavy snowstorm. Therefore, managing the value chain for the ski resort requires taking care of not just the snowplow operator, but also the mechanic who services the plow operator's truck. Both individuals are key parts of a value chain management system for the resort. This makes "value chain management" the correct response and rules out all other responses.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 81) ________ focuses on providing an efficient flow of resources to an organization.

A) Supply chain management B) Value chain management C) Value D) Supply Answer: A Explanation: A) Value chain management is an externally oriented process that focuses on anything that provides value for a value chain, both inputs and outputs.

Supply chain management, on the other hand, focuses entirely on incoming resources, not outputs, making this choice the correct response. Value and supply themselves are what guide each management process, not the management processes themselves.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

82) Value chain management is ________ oriented.

A) supplier B) internally C) manager D) externally Answer: D Explanation: D) Value chain management is an externally oriented process that focuses on anything that provides value along the transformation process, both inputs and outputs, making "externally" the correct response. Supply chain management, on the other hand, is internally focused and supplier focused, making "internally" and "supplier" both incorrect responses. Neither value chain nor supply chain management is especially manager oriented, making "manager" an incorrect response.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 83) All of the following are characteristics of value chain management EXCEPT ________.

A) it is externally oriented B) it focuses on both incoming materials and outgoing products and services C) it is efficiency oriented D) it is effectiveness oriented Answer: C Explanation: C) Key characteristics of value chain management include being externally oriented on both inputs and outputs and having effectiveness rather than efficiency as its priority. This makes being "efficiency oriented" the correct response.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 84) In value chain management, ultimately the ________ have power to make changes.

A) suppliers B) customers C) employees D) managers Answer: B Explanation: B) Instead of suppliers, employees, or managers, customers hold all power in a value chain management system because they are the ones who decide whether actions and features have value, making "customers" the correct response.

For example, a supplier for a chocolate company may have what they think is the world's best cocoa beans. However, unless customers are willing to pay extra for those beans, they will not be incorporated into the value chain. Thus, customers make the decision about how the chain will be configured.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

85) When value is created by incorporating a new step in a value chain, ________ benefits.

A) everyone downstream from that step in the chain B) only the party that initiated the step C) everyone in the chain D) only the customers Answer: C Explanation: C) Every increase in value along a value chain benefits not just the initiator of the improvement, downstream partners in the chain, and customers, but all members of the chain, making "everyone in the chain" the correct response. An increase in value means more customer sales and more profits and other benefits for all partners in the chain.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 86) A new cell phone battery doubles battery life but also increases the cost of the phone. This battery adds ________.

A) no value to the phone since it increases the cost B) value to the phone only if the cost can be cut C) value to the phone if more customers buy the phone D) no value to the phone if more customers buy the phone Answer: C Explanation: C) The new battery can add value if and only if it increases sales for the phone, making "value to the phone if more customers buy the phone" the correct response. Increasing the cost is negative only if it decreases sales, so the two choices indicating no value are incorrect responses. The cost of the phone may not need to be cut if customers judge that the extra battery life is worth the higher price.

Diff: 3 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 87) Since all partners in a value chain benefit when value is added, partners ideally should ________.

A) collaborate closely B) work independently of one another C) be dependent only on their narrow local part of the chain D) collaborate with every other part of the chain Answer: A Explanation: A) Value chains should aim to work as a unit, meaning they should collaborate closely, making that choice the correct response. Both "work independently" and "work dependently" are incorrect responses because they limit the amount of collaboration that takes place. That being said, trying to collaborate with every other part of the chain is probably unrealistic and unproductive, so this choice is not a correct response.

Diff: 2 Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

88) A business model is ________.

A) a competitor that a company seeks to emulate B) a strategic design for how a company intends to make profit C) a theoretical ideal that a company seeks to emulate D) an unrelated organization whose practices a company seeks to emulate Answer: B Explanation: B) A business model is not a model that an organization tries to emulate whether it is a competitor, a theoretical ideal, or an unrelated company, making all of these choices incorrect. A business model is, instead, a plan that reveals the edge that a company has that will allow it to profit from a situation. For example, one company might feature an efficiency business model in which it can control costs better than its competitors, while a second company may feature some unique product that gives it an edge over the competition.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 89) The requirement for value chain management that involves being flexible and sharing information is ________.

A) employees/human resources B) technology investment C) coordination and collaboration D) organizational processes Answer: C Explanation: C) Coordination and collaboration involves partners being flexible, open, and sharing information, making this choice the correct response. Technology investment involves intelligently applying computer and other forms of technology toward increasing efficiency, communication, or some other value-adding element to the value chain. Organizational processes involves how work is actually done in a value chain. Employees/human resources involves finding and training people who can learn, adapt, and are flexible enough to function in a successful value chain.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

90) The requirement for value chain management that involves better product demand forecasting information is ________.

A) leadership B) organizational culture and attitudes C) coordination and collaboration D) organizational processes Answer: D Explanation: D) Organizational processes involve how work is actually done in a value chain. This often entails restructuring how suppliers link to customers to learn how much demand there is for their product. This makes "organizational processes" the correct response. Coordination and collaboration involves partners being flexible, open, and sharing information. Leadership involves effectively communicating expectations and values to motivate and coordinate not just some but all partners along a value chain. Organizational culture and attitudes requires all members of a value chain to share ideas about such things as collaboration, trust, mutual respect, and flexibility.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 91) The requirement for value chain management that is most closely associated with defining and communicating expectations is ________.

A) coordination and collaboration B) technology investment C) organizational culture and attitudes D) leadership Answer: D Explanation: D) Leadership involves effectively communicating expectations and values to motivate and coordinate not just some but all partners along a value chain, making "leadership" the correct response. Organizational culture and attitudes requires all members of a value chain to share ideas about such things as collaboration, trust, mutual respect, and flexibility. Coordination and collaboration involves partners being flexible, open, and sharing information. Technology investment involves intelligently applying computer and other forms of technology toward increasing efficiency, communication, or some other value-adding element to the value chain.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

92) The requirement for value chain management that is most closely associated with trust is ________.

A) organizational culture and attitudes B) technology investment C) organizational processes D) employees/human resources Answer: A Explanation: A) Organizational culture and attitudes require all members of a value chain to share ideas about such things as collaboration, trust, mutual respect, and flexibility. Since trust is highlighted in this category, it is the correct response.

Organizational processes involves how work is actually done in a value chain.

Employees/human resources involves finding and training people who can learn, adapt, and are flexible enough to function in a successful value chain. Technology investment involves intelligently applying computer and other forms of technology toward increasing efficiency, communication, or some other value-adding element to the value chain.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 93) The requirement for value chain management that includes an enterprise resource planning (ERP) system to link all of an organization's activities is ________.

A) employees/human resources B) technology investment C) coordination and collaboration D) leadership Answer: B Explanation: B) Technology investment involves intelligently applying computer and other forms of technology toward increasing efficiency, communication, or some other value-adding element to the value chain. An ERP system is a computer software system, so "technology investment" is the correct response. Employees/human resources involves finding and training people who can learn, adapt, and are flexible enough to function in a successful value chain. Leadership involves effectively communicating expectations and values to motivate and coordinate not just some but all partners along a value chain. Coordination and collaboration involves partners being flexible, open, and sharing information.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

94) The requirement for value chain management that is most closely associated with learning on the job is ________.

A) employees/human resources B) technology investment C) coordination and collaboration D) organizational processes Answer: A Explanation: A) Employees/human resources involves finding and training people who are flexible, can adapt, and especially can learn new skills and tasks in a value chain, making this choice the correct response. Coordination and collaboration involves partners being flexible, open, and sharing information. Technology investment involves intelligently applying computer and other forms of technology toward increasing efficiency, communication, or some other value-adding element to the value chain. Organizational processes involves how work is actually done in a value chain.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 95) An especially difficult part of the coordination and collaboration requirement for successful value chain management is identifying things that ________.

A) you value but customers do not value B) customers value but you do not value C) both you and customers value D) you value but do not add value to the value chain Answer: B Explanation: B) A key to a good value chain management system is for a manager to recognize what customers value even if it means nothing to him or her. For example, a wine maker may think the label of a wine bottle is utterly unimportant, but if customers find value in an attractive label, the wine maker must recognize that value.

This makes "customers value but you do not value" the correct response and rules out other responses.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

96) Dell uses ________ to coordinate suppliers, customers, and its own employees to stay on top of orders that come in.

A) frequent telephone calls B) an enterprise resource planning system C) email D) Facebook and Twitter Answer: B Explanation: B) Telephones, email, and social networking sites are not enough to keep production and scheduling of PCs rolling in Dell's facilities. Instead, Dell turns to an ERP, which coordinates its own employees with customers and suppliers, constantly updating information, to keep things running smoothly.

Diff: 2 AACSB: Use of information technology Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 97) Organizational processes in value chain management organizations need to eliminate ________.

A) nonvalue-adding activities B) demand forecasting C) ties between customers and suppliers D) organizational core competencies Answer: A Explanation: A) Organizational processes require that such things as demand forecasting and customer-supplier ties be increased rather than decreased. Core competencies are exploited by an organization in this situation, not eliminated. What managers must do is get rid of any activities that are not adding value to the value chain, making "nonvalue-adding activities" the correct response.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 98) In organizations such as Saint-Gobain Performance Plastics, ________ are brought together to work on the company's premises.

A) customers and company employees B) current and retired employees C) competitors and customers D) customers and suppliers Answer: D Explanation: D) Saint-Gobain Performance Plastics brings customers and suppliers to work together in its facility so it can find out exactly what each party needs, making "customers and suppliers" the correct response and ruling out all other responses.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

99) Value in a value chain management organization should be driven ________.

A) from the top down only B) from the bottom up only C) from the middle up D) from the top and the bottom up Answer: D Explanation: D) The CEO of the Furon Company explains that value needs to come from the top, that is, from top management looking for ways to find value in the value chain, and also from the bottom, from customers whose preferences direct and shape products, meaning "from the top down and the bottom up" is the correct response.

Top-down or bottom-up only approaches are too limited. A "middle up" approach was not suggested by the Furon CEO, so "middle up" is an incorrect response.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 100) One key measurement that managers in value chain management companies strive to make is an accurate ________.

A) supply forecast B) weather forecast C) demand forecast D) production forecast Answer: C Explanation: C) An accurate demand forecast from customers gives suppliers and producers a way to gauge their level of production for the near future. If the demand forecast is high, suppliers and producers step up production. If demand is low, they step production down. This makes "demand forecast" the correct response. A supply or production forecast would not be useful since it would not match demand. A weather forecast would be important only in industries that depend on specific types of weather.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

101) One of the most important things a leader can do in a value chain management company is ________.

A) provide a good role model B) show a positive attitude C) be friendly with employees D) clearly express expectations Answer: D Explanation: D) Though positive attitudes, friendliness, and providing a good role model can all be pluses for a leader, making sure that partners throughout the value chain understand exactly what is expected of them is a critical function of a leader.

This makes "clearly express expectations" the correct response. When value chain partners don't understand what is expected of them, they can fail to perform optimally and drag down an entire value chain. That is why clearly identifying and expressing expectations is such an important function for leaders of value chain management companies.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 102) American Standard improved the quality of its value chain by getting rid of partners who ________.

A) could not work on holidays B) could not meet expectations C) were not in the bath and kitchen business D) were not suppliers Answer: B Explanation: B) By having high expectations and laying those expectations out clearly, American Standard avoided trouble in its value chain by eliminating supplier partners who could not perform up to company expectations, making that choice the correct response. These partners were suppliers in the kitchen and bath business, which rules out the choices indicating not being in the bath and kitchen business and not being suppliers. Not working holidays can be ruled out because working on holidays was not recognized as an important issue in this situation.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

103) This is the most important resource in any value chain.

A) employees B) raw materials C) capital D) technology Answer: A Explanation: A) While materials, capital, and technology can be important parts of a value chain, the chain will only perform as well as the people who make it up allow, making "employees" the correct response. Ultimately, all value refers back to people in the chain that include suppliers, employees, managers, and customers.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 104) Above all, jobs and job design in a value chain management company must be ________.

A) flexible B) high paying C) strictly defined and not likely to change D) completely undefined Answer: A Explanation: A) Flexibility is the key to jobs in a successful value chain, making "flexible" the correct response. Flexibility is likely to lead to success, which can result in high pay, but high pay is not a requirement for value chain jobs. "Strictly defined" can be ruled out because it describes an inflexible, rather than a flexible, job, while an undefined job is not likely to be successful in any kind of an organization.

Diff: 3 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 105) The key to any job in a successful value chain is that it ________.

A) is well defined and easy to carry out B) best helps the chain create customer value C) is maximally efficient D) saves time and money Answer: B Explanation: B) Whether a job is efficient, well defined, or saves time and money is secondary in a value chain. The only thing that matters in the chain is that the job creates value, making "best helps the chain create customer value" the correct response. Of course, more efficient creation of customer value is better than less efficient creation of customer value, but it is important to recognize that it is the value and not efficiency that comes first.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

106) Workers in a value chain management company need to be ready to ________ at any time.

A) work in dangerous conditions B) learn new job skills C) compete with coworkers D) lose their jobs Answer: B Explanation: B) Since feedback from some part of the value chain can cause the job that a worker does to change, workers need to be able to learn new skills at any time, making "learn new job skills" the correct response. Working in dangerous conditions, competing with coworkers, and constantly fearing for their jobs are things that value chain jobs typically do not ask of workers.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 107) Because the nature of jobs can change quickly, value chain management companies often need to make a significant investment in ________.

A) heavy equipment B) market research C) light equipment D) job training Answer: D Explanation: D) When jobs change quickly, investing in heavy or light equipment can be risky, making these two choices incorrect responses. Market research would not help a company cope with changing jobs, so that choice is an incorrect response.

What does help companies cope with rapidly changing jobs is job training, making "job training" the correct response.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 108) Organizational culture and attitudes are shared by ________ value chain partners.

A) external B) internal C) both internal and external D) customers and external Answer: C Explanation: C) Organizational attitudes and culture are not just for internal value chain partners. They should also be shared by external partners, making "both internal and external" the correct response and ruling out the two choices that only indicate one of these. Customers can't really be expected to share company values, so "customers and external" is an incorrect response.

Diff: 2 Objective: 15.3 Learning Outcome: Explain the influences of organizational culture

109) In order for a value chain to function successfully, different partners in the chain must ________.

A) have trust in one another B) compete with one another C) distrust one another D) like one another Answer: A Explanation: A) Competition or distrust among value chain partners would be counterproductive, so both of those choices are incorrect. Partners do not need to like one another, but mutual respect and trust is essential for any successful value chain management organization.

Diff: 2 Objective: 15.3 Learning Outcome: Explain the influences of organizational culture 110) Attitudes that value collaborating, openness, and mutual respect are requirements for ________.

A) all value chain management companies B) all companies C) all value chain management companies that use a "sharing" style D) some, but not all, value chain management companies Answer: A Explanation: A) Part of being a value chain management company is to adopt organizational culture and attitudes that prize collaboration, openness, and mutual respect for partners in the organization, making "all value chain management companies" the correct response and ruling out all other responses. "All companies" is not a correct response for this question because traditional mechanistic companies, for example, do not value such things as openness and collaboration highly. The remaining two choices are incorrect because they do not include all value chain management companies.

Diff: 2 Objective: 15.3 Learning Outcome: Explain the influences of organizational culture

111) One of the biggest obstacles to successful value chain management on the organizational level is an organization that ________.

A) shares information B) refuses to share information C) insists on shaking up the status quo D) collaborates Answer: B Explanation: B) To be successful, value chain management organizations must learn to share, so when companies refuse to share, it can be a real obstacle to success, making "refuses to share information" the correct response. Shaking up the status quo and collaboration improve, rather than act as obstacles to, value chains, so both of those choices are incorrect.

Diff: 2 AACSB: Communication abilities Objective: 15.3 Learning Outcome: Describe communication skills and the factors affecting communication within an organization 112) Value chains that ________ information technology infrastructure often have problems coordinating and collaborating.

A) share the same B) fail to share compatible C) purchase up-to-date D) provide their own Answer: B Explanation: B) Just as having a smooth-running IT system can greatly benefit a value chain, when partners in the chain fail to share compatible systems, big problems arise, making this choice the correct response and ruling out "share the same." Up-todate systems and companies that provide their own in-house systems can actually benefit, rather than experience trouble, from their systems.

Diff: 2 AACSB: Use of information technology Objective: 15.4 Learning Outcome: Describe communication skills and the factors affecting communication within an organization

113) When ________ exist(s) in a value chain, partners will be extremely reluctant to share information.

A) sophisticated technological infrastructure doesn't B) sophisticated technological infrastructure C) trust doesn't D) trust Answer: C Explanation: C) Sophisticated technological infrastructure has little effect one way or another on whether value chain partners will share information, making both choices regarding sophisticated technological infrastructure incorrect responses. Trust does affect information sharing—lack of trust prevents sharing, making "trust doesn't" the correct response and eliminating "trust."

Diff: 2 Objective: 15.3 Learning Outcome: Explain the influences of organizational culture 114) ________ can lead to a value chain management company suffering losses of intellectual property.

A) Not enough trust B) Too much trust C) Not enough diversity D) Too much diversity Answer: B Explanation: B) Trust is a necessary requirement for successful value chain function.

However, too much trust can tempt partners to appropriate proprietary intellectual property from one another, so partners should always guard their knowledge systems, making "too much trust" the correct response and eliminating "not enough trust" as a correct response. Diversity has little or no effect on loss of intellectual property, so the two remaining choices are both incorrect.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 115) Some organizations erroneously feel that they ________ when they collaborate with a variety of value chain partners.

A) lose control of their destiny B) gain control of their destiny C) change their destiny D) control the destiny of other partners Answer: A Explanation: A) When organizations that are used to "going it alone" get involved in a value chain, they sometimes feel that they lose control of their own decision-making power, making "lose control of their destiny" the correct response and ruling out all other choices. In most cases, this feeling is mistaken, as taking part in a value chain does not cause a company to lose control of its decision-making ability or destiny.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 116) In many value chains, an organization must have the ability to educate

________.

A) internal partners only B) external partners only C) only its own employees D) both internal and external partners Answer: D Explanation: D) Successful partners in value chains need to educate not just internal, external, and their own partners. Education must take place both internally and externally, making this choice the correct response. Internal education occurs when partners show their own people or related companies how to perform a task. External education occurs when an organization must reach beyond its organizational boundaries to teach or become informed about some process or skill that will add value to the transformation process.

Diff: 2 Objective: 15.3 Learning Outcome: Discuss the factors that affect how individuals behave and learn within an organization 117) Managers who are carrying out value chain management invest ________ than managers of conventional organizations.

A) less time and energy B) more time and energy C) more of their own money D) more of the company's money Answer: B Explanation: B) Value chain management is incredibly time-consuming and labor intensive for managers. Motivating and coordinating not just one's own organization but members of other organizations takes a great deal of effort on the part of managers, making "more time and energy" the correct response and "less time and energy" incorrect. Value chain management has little or no effect on how much managers invest monetarily in organizations, so both choices regarding money are incorrect responses.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

118) A device with e-enabled maintenance control saves money by doing this when it malfunctions or needs maintenance.

A) fixing itself B) alerting others with e-messages C) self-destructing D) sounding an alarm Answer: B Explanation: B) An e-enabled device doesn't sound an alarm, self-destruct, or fix itself when it needs attention. Instead, the device senses when it needs attention and sends out an electronic message—in the form of an email or some other message— that informs the receiver what the problem is and what should be done to fix the problem. This makes "alerting others with e-messages" the correct response.

Diff: 2 AACSB: Use of information technology Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 119) In today's manufacturing operations, managers often monitor capacity, order status, and product quality ________ made.

A) before the product is B) while the product is being C) after the product is D) both before and after the product is Answer: B Explanation: B) Traditionally, managers would monitor things like order status after the product is made, but not while it is being made. This makes "while the product is being" the correct response and rules out "after." Monitoring before or both before and after a product is made would not be as useful as monitoring during the manufacturing process since concurrent monitoring provides instant status information of all operations that relate to the product.

Diff: 2 AACSB: Use of information technology Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

120) Apple's problems with the battery of the highly successful iPod show how important ________ is for a product.

A) efficiency B) design C) quality D) productivity Answer: C Explanation: C) The battery problem that Apple had with its iPod battery had nothing to do with design of the product or the efficiency or productivity of the manufacture of a product. Instead, what cost Apple over $100 million was a quality breakdown in the battery. Not only did a quality failure cause Apple to lose money in the case, it also caused Apple to lose prestige and some trust of its customers.

Diff: 2 AACSB: Use of information technology Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 121) In evaluating quality, the performance of a product is measured in ________.

A) how the product looks and feels B) how well the product operates C) how long it takes the product's operation to deteriorate D) what special characteristics a product has Answer: B Explanation: B) The performance of a product is measured in its operating characteristics, making "how well the product operates" the correct response. How a product looks and feels reflects the aesthetics of the product. How long it takes for a product's normal operation to break down or fail in some way shows the durability of the product. Special characteristics of a product are its features.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 122) Courtesy and timeliness are measures of ________.

A) product quality B) service quality C) product appeal D) service cost Answer: B Explanation: B) Service quality measures such dimensions as courtesy, timeliness, and consistency, making "service quality" the correct response. Product quality measures dimensions such as performance, features, and flexibility, so this choice is not correct. Product appeal and service cost are not measured in terms of such categories as courtesy and timeliness.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

123) A high-quality product that doesn't break down and doesn't suffer from significant performance deterioration over a long period of time is said to have ________.

A) conformance B) aesthetics C) features D) durability Answer: D Explanation: D) The durability of a product measures how long it takes for the product's performance to break down or fail in some way, making "durability" the correct response. How a product looks and feels reflects the aesthetics of the product.

How well the product meets standards is a measure of its conformance. The functional characteristics that a product has are its features.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 124) Durability and features are measures of ________.

A) product quality B) service quality C) product value D) service value Answer: A Explanation: A) Product quality measures such dimensions as durability, performance, and features, making this choice the correct response. Service quality measures dimensions such as timeliness, courtesy, and consistency, so this choice is not correct. Product and service value are not quantifiable measurements that managers make in assessing quality.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 125) High-quality service that gives customers an experience that doesn't vary from time to time is called ________.

A) convenience B) accuracy C) completeness D) consistency Answer: D Explanation: D) Consistency is providing the same customer experience from time to time, making this choice the correct response. Convenience measures how accessible service is. Completeness measures whether all aspects of service were delivered.

Accuracy measures whether service tasks were performed correctly each time.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

126) A product such as an iPod that has a design that is appealing to customers is said to have good ________.

A) durability B) aesthetics C) features D) conformance Answer: B Explanation: B) The design of a product and how it looks and feels to the customer is a measure of the product's aesthetics, making this choice the correct response. How well the product meets standards is a measure of its conformance. The functional characteristics that a product has are its features. The durability of a product measures how long it takes for the product's performance to break down or fail in some way.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 127) High-quality service that gives customers a cheerful and helpful experience is called ________.

A) consistency B) accuracy C) courtesy D) convenience Answer: C Explanation: C) Courtesy is providing a helpful, polite, cheerful customer experience, making this choice the correct response. Convenience measures how accessible service is. Consistency is providing the same customer experience from time to time.

Accuracy measures whether service tasks were performed correctly each time.

Diff: 2 AACSB: Communication abilities Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

128) When a customer gets frustrated from being put on hold during a customer service call for 30 minutes, the company is having problems with which service quality dimension?

A) timeliness B) consistency C) convenience D) courtesy Answer: A Explanation: A) How long it takes for service to occur and whether the service task gets completed in its designated time period is a measure of timeliness, making this choice the correct response. Consistency is providing the same customer experience from time to time. Courtesy is providing a helpful, polite, cheerful customer experience. Convenience measures how accessible service is.

Diff: 2 AACSB: Communication abilities Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 129) Northrup Grumman Corporation empowers employees to ________ about products throughout the manufacturing process as a means of monitoring quality.

A) accept decisions B) reject decisions C) make accept/reject decisions D) obey decisions Answer: C Explanation: C) Northrup Grumman's employees do something different than simply accept, reject, and obey decisions made by others. The company's employees get to determine product acceptability in the form of an accept/reject decision, making this choice the correct response. If for any reason the employees judge that the product is not satisfactory, they can reject it on the spot rather than wait for management to make the decision.

Diff: 2 AACSB: Communication abilities Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 130) ISO 9000 is a series of standards that ensure that products ________.

A) are of minimal quality B) conform to customer requirements C) conform to industry rules D) exceed government requirements Answer: B Explanation: B) Though operations that receive ISO 9000 certification almost certainly have minimal quality, conform to industry rules, and exceed government rules, the main purpose of the program is to make sure that products meet requirements that are set by customers. This makes "conform to customer requirements" the correct response.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

131) In the Six Sigma system, this is the highest level of quality.

A) Zero Sigma B) One Sigma C) Four Sigma D) Six Sigma Answer: D Explanation: D) In the Six Sigma system, the higher the Sigma level, the fewer defects a product has. At level One Sigma, only two-thirds of the items being measured fall within the bell curve of having an acceptably low number of defects. At Two Sigma, 95 percent lie within the curve. At Six Sigma, the highest level, there are no more than 3.4 defects per million units, making "Six Sigma" the correct response and ruling out all other responses.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 132) Each work activity in a Gantt chart is represented by two horizontal bars that identify the ________.

A) goal and the date B) date and the manager's name C) goal and actual progress D) actual progress and manager's name Answer: C Explanation: C) A Gantt chart shows the goal with one bar and the actual progress being made for the activity with a second, adjacent bar, making this choice the correct response. The date and manager's name are given in the other three choices, making them incorrect responses.

Diff: 2 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 133) To find out how many activities are taking place at a given time in a Gantt chart, ________.

A) read across a single row B) read down a single column C) count the total number of bars D) count the total number of actual progress bars Answer: B Explanation: B) A strength of a Gantt chart is that it allows users to read down a single column and get an instant assessment of how many activities are taking place at a given time, making "read down a single column" the correct response. The more bars that the line goes through, the more activities that are taking place at that point in time. Neither reading across or counting bars provides simultaneous activity information so they are incorrect responses.

Diff: 2 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

134) A load chart is a ________ that schedules capacity by ________.

A) graph; activity B) PERT; workstation C) modified Gantt chart; workstation D) modified Gantt chart; activity Answer: C Explanation: C) The major difference between a load chart and a Gantt chart is that a load chart schedules by workstation while a Gantt chart schedules by activity. A load chart is actually a modified Gantt chart making "modified Gantt chart; workstation" the correct response. Load charts measure by workstation, not activity, ruling out the two choices indicating activity. Load charts have nothing to do with PERT analysis, eliminating "PERT; workstation" as a possible correct response.

Diff: 2 Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 135) The critical path in a PERT is the ________ sequence of events that is required to complete the project in the ________ period of time.

A) longest; longest B) shortest; shortest C) longest; shortest D) shortest; longest Answer: C Explanation: C) In a PERT, the critical path is a measure of how long the project will take if all possible steps in the process are taken with no shortcuts or skipped steps. In other words, the critical path is the shortest amount of time it takes to complete the entire sequence of events with all possible steps taken. This makes "longest; shortest" the correct response and rules out all other responses.

Diff: 2 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

136) In PERT, the time difference between the critical path and any other path is called ________.

A) slack time B) critical time C) network time D) lost time Answer: A Explanation: A) Rather than measure lost time, the difference between the critical path and other paths in PERT makes up slack time, which is extra time that can be used if things fall behind schedule. This makes "slack time" the correct response.

Critical time, network time, and lost time all are terms that are not officially recognized in PERT. Diff: 2 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 137) In a short essay, define and describe operations management.

Answer: The term operations management refers to managing and controlling the transformation process that converts such resources as labor and raw materials into goods and services that are sold to customers. The process takes in inputs—people, technology, capital, equipment, materials, and information—and transforms them into finished goods and services. Operations management encompasses both services and manufacturing sectors of the economy. Operations management is a way to control and manage productivity—the key to almost every organization's success.

Diff: 3 AACSB: Analytic thinking Objective: 15.1 Learning Outcome: Discuss the functions and tools of operations management 138) In a short essay, define value and explain how it is obtained.

Answer: Value is any part of a good or service that customers are willing to pay for in terms of money or some other resource. For example, a laptop computer has value because customers are willing to pay money for it. The RAM memory inside of the computer also has value because customers are willing to pay more for a computer with more RAM memory. The color of the computer's case is an important feature of the computer, but it does not add value because customers are not willing to pay more for a black computer (for example) than a white computer.

Diff: 3 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

139) In a short essay, explain what a value chain is.

Answer: When inputs go through the transformation process to produce outputs, value is added to the original inputs at each step of the way, creating a value chain.

For example, when you bake a cake you start with original ingredients—inputs—and during each step of the process you add value to the cake. Mixing the flour, sugar, and butter adds value. Folding in chocolate adds value. Pouring the batter into a greased pan adds value. Baking at the right temperature adds value. Each step of the process adds value because it contributes to making a better cake. A better cake has more value because customers are willing to pay for it.

Diff: 3 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management 140) In a short essay, explain what value chain management is.

Answer: Value chain management is the control and management of a value chain. A value chain is a series of steps that add value to a product. If the product is a car then all of the steps in designing, planning, supplying materials, making, and marketing the car add to the car's value chain. This value chain must be managed, and according to value chain management theory, it must be managed with value in mind at every step.

For example, if customers state that they require a GPS in every car model, then the value chain must be modified so it includes this value-adding feature. That might entail new suppliers, new design plans, new assembly procedures, and so on. The management of these changes is what takes place in value chain management.

Note that the process is driven by customer value. If the customers—typically expressing themselves through sales totals—indicate that a specific feature of the car, such as a GPS or a cup holder, has value, then it is the responsibility of the managers of the value chain to make sure that these features are included in the product.

Diff: 3 AACSB: Analytic thinking Objective: 15.2 Learning Outcome: Discuss the functions and tools of operations management

141) In a short essay, describe the coordination and collaboration that is necessary for successful value chain management.

Answer: For the value chain to achieve its goal of meeting and exceeding customers' needs and desires, integration among all members of the chain is necessary. All partners in the value chain must participate in identifying features of the product that have value.

For example, if marketers of an electronic book learn that customers really want to be able to write notes and mark pages in their electronic books, it is the responsibility of those marketers to share that information with people in other parts of the value chain who can implement those changes into the product.

Sharing information and being flexible as far as who in the value chain does what are important steps in building coordination and collaboration. There must be a constant back and forth between different parts of the chain. Marketers must listen to customers. Engineers must listen to marketers. Designers must listen to engineers, and so on.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 142) In a short essay, identify and discuss the leadership requirements for successful value chain management.

Answer: Successful value chain management isn't possible without strong and committed leadership. At all levels, managers must support, facilitate, and promote the implementation and ongoing practice of value chain management. Managers must make a serious commitment to identifying what value is, how that value can best be provided, and how successful those efforts have been.

Leaders should outline expectations for what is involved in the organization's pursuit of value in its products. Ideally, this should start with a vision or mission statement that expresses the organization's commitment to identifying, capturing, and providing the highest possible value to customers. Throughout the organization, managers should clarify expectations regarding each employee's role in the value chain. Being clear about expectations also extends to partners outside of the organization.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Summarize the basic characteristics of major leadership theories

143) In a short essay, identify and explain the three main human resource requirements for value chain management.

Answer: The three main human resource requirements for value chain management are flexible approaches to job design, an effective hiring process, and ongoing training.

Flexibility is the key to job design in a value chain management organization.

Traditional functional job roles—such as marketing, sales, accounts payable, customer service, and so forth—are inadequate in a value chain management environment. Instead, jobs must be designed around work processes that create and provide value to customers.

To carry out flexible jobs successfully, organizations need flexible employees. In a value chain organization, employees may be assigned to work teams that tackle a given process and may be asked to do different things on different days depending on need. In such an environment, an employee's ability to be flexible is critical.

Therefore, the organization's hiring process must be designed to identify those employees who have the ability to learn and adapt.

Finally, the need for flexibility also requires that there be a significant investment in continual and ongoing employee training. Whether training involves learning basic information or how to perform some specific task, managers must see to it that employees have the knowledge and tools they need to do their jobs efficiently and effectively.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Identify and discuss the components of the human resource management process 144) In a short essay, explain how organizational barriers can be an obstacle to effective management of a value chain.

Answer: Organizational barriers are among the most difficult obstacles that managers handle. These barriers include refusal or reluctance to share information, reluctance to shake up the status quo, and security issues. Without shared information, close coordination and collaboration in a value chain are impossible. The reluctance or refusal of employees to change the way they do things can impede efforts toward value chain management and prevent its successful implementation. Finally, because value chain management relies heavily on a substantial information technology infrastructure, system security and Internet security breaches are issues that need to be addressed.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

145) In a short essay, explain how cultural attitudes can be an obstacle to effective management of a value chain.

Answer: Unsupportive cultural attitudes can be major obstacles to successful value chain management. Trust can work against a value chain management system in two different ways—both lack of trust and too much trust can be a problem. To be effective, partners in a value chain must trust one another to perform their duties along the chain. When trust and mutual respect don't exist, partners will be reluctant to share information, capabilities, and processes.

Too much trust also can be a problem for a value chain. Since partners in a chain must work together and share all kinds of proprietary information, they must take care that important organizational information does not end up being appropriated or disseminated on the Internet. To guard against loss of intellectual property value, chain partners should always share only what needs to be shared and make sure that firewalls and other security measures are in place.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Explain the influences of organizational culture 146) In a short essay, explain how required capabilities can be an obstacle to effective management of a value chain.

Answer: Required capabilities are the special abilities that value chain partners must have. Several of these, including effective coordination and collaboration, the ability to learn new skills and tasks, the ability to adapt to new situations and adopt new procedures, are capabilities that are difficult to acquire. Nevertheless, these skills and abilities are essential for a successful value chain, so managers must constantly press to make sure that all members of the chain have the qualities that are needed.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management 147) In a short essay, explain how people can be an obstacle to effective management of a value chain.

Answer: People can be obstacles to successful value chain management by failing to commit fully to the idea of meeting customer needs and desires. Without their unwavering commitment and willingness to do whatever it takes, a value chain can suffer. If employees decide to just "do their job" rather than to focus on adding value to the value chain, productivity will suffer and products will not be successful. To make sure that employees are committed to value chain management practices, managers need to do a lot of urging, coaching, encouraging, and motivating.

Diff: 3 AACSB: Analytic thinking Objective: 15.3 Learning Outcome: Discuss the functions and tools of operations management

148) In a short essay, define and discuss quality control in an organization.

Answer: Controlling for quality is the responsibility of every member of the organization. Quality control refers to monitoring quality—weight, strength, consistency, color, taste, reliability, finish, or any one of many characteristics—to ensure that the product, whatever it is, meets some preestablished standard.

Quality control is typically needed at one or more points in the transformation process, beginning with the receipt of inputs. It will continue with work in process and all steps up to the final product. Assessments at intermediate stages of the transformation process typically are part of a quality control program. Early detection of a defective part or process can save the cost of further work on the item.

Diff: 3 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 149) In a short essay, define the practice of project management and explain why many organizations are turning to this approach.

Answer: A project is a one-time-only set of activities with a definite beginning and ending point; project management is the task of accomplishing the set of activities on time, within budget, and according to specifications. More and more organizations are turning to project management because the approach fits well with their need for increased managerial flexibility and rapid response. Organizations are increasingly undertaking projects that are somewhat unusual or unique, have specific deadlines, contain complex interrelated tasks requiring specialized skills, and are temporary in nature. These sets of activities don't lend themselves well to the traditional operating procedures that guide routine and continuous organizational activities, but they are a good fit for the project management approach.

Diff: 3 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

150) In a short essay, explain the difference between a Gantt chart and a load chart, identifying possible uses for each tool.

Answer: The Gantt chart is a planning tool that is essentially a double bar graph, with time on the horizontal axis and the activities to be scheduled on the vertical axis. The bars show output, both planned and actual, over a period of time. The Gantt chart visually shows when tasks are supposed to be done and compares the assigned date with the actual progress on each. Managers can easily see what has yet to be done to complete a job or project and to assess whether it is ahead of, behind, or on schedule.

A modified version of the Gantt chart that organizes by workstation is called a load chart. Instead of listing activities on the vertical axis, load charts list either whole departments or specific resources. This information allows managers to plan and control for capacity utilization by workstation rather than by activity.

Diff: 3 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 151) In a short essay, identify and explain the first three steps in developing a PERT network.

Answer: The first step in developing a PERT network is to identify every significant activity that must be achieved for a project to be completed. The accomplishment of each activity results in a set of events or outcomes.

The second step is to determine the order in which these events must be completed.

The third step is to diagram the flow of activities from start to finish, identifying each activity and its relationship to all other activities. Circles are used to indicate events and arrows to represent activities. This results in a flowchart diagram called a PERT network.

Diff: 3 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management

152) In a short essay, identify and explain the final two steps in developing a PERT network.

Answer: The fourth step in developing a PERT network is to compute a time estimate for completing each activity. This is done with a weighted average that uses an optimistic time estimate (to) of how long the activity would take under ideal conditions, a most likely estimate (tm) of the time the activity normally should take, and a pessimistic estimate (tp) that represents the time that an activity should take under the worst possible conditions.

Using the network diagram that contains time estimates for each activity, the final step is to determine a schedule for the start and finish dates of each activity and for the entire project. Any delays that occur along the critical path require the most attention because they can delay the whole project.

Diff: 3 AACSB: Analytic thinking Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management 153) In a short essay, discuss technology's role in manufacturing.

Answer: To connect more closely with customers, and to avoid bottlenecks and slowdowns, production in any organization must be synchronized and coordinated across the enterprise. What makes this kind of coordination possible is technology.

For example, enterprise resource planning (ERP) software is a system that links all parts of an organization and its partners to the same database, allowing people across the organization to have access to sales, production, scheduling, budgets, and other forms of data.

Technology is also allowing organizations to control costs, particularly in the areas of predictive maintenance, remote diagnostics, and utility cost savings. For instance, new types of Internet-compatible equipment contain embedded Web servers that can communicate proactively to inform users that a device needs maintenance or servicing. These devices can do more than simply beep or light up an indicator button.

For example, some devices have the ability to initiate email or signal a pager at a supplier, the maintenance department, or contractor describing the specific problem and requesting parts and service.

Diff: 3 AACSB: Use of information technology Objective: 15.4 Learning Outcome: Discuss the functions and tools of operations management Fundamentals of Management, 9e (Robbins) Chapter 15a Entrepreneurship Module 1) Entrepreneurship is the process of starting a new business to respond to an opportunity in the market.

Answer: TRUE Explanation: Entrepreneurship is an innovative attempt to take advantage of some need in the market. Entrepreneurial organizations are always innovative and looking to grow.

Diff: 1

Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 2) An entrepreneurial venture is the same as a small business.

Answer: FALSE Explanation: An entrepreneurial venture and a small business can look similar from the outside. However, an entrepreneurial venture focuses much more on being innovative, seeking opportunities, and growth than a small business.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 3) An entrepreneurial venture is much more likely to change an industry than a small business.

Answer: TRUE Explanation: Being much more innovative than a small business, an entrepreneurial venture looks to invent new products and methods of production that change an entire industry. An example is the Viking Range, which helped create an entire new type of super-premium kitchen appliance.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 4) Most entrepreneurial ventures are successful.

Answer: FALSE Explanation: Data shows that only 44 percent of ventures survive four years of business. After seven years, only 31 percent of ventures remain.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 5) One of the first things an entrepreneur does is look for potential opportunities in the marketplace.

Answer: TRUE Explanation: Identifying opportunity is the first thing any entrepreneur does. Without finding an opportunity there is no reason to start an organization.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 6) Legal issues for an entrepreneurial organization typically are addressed after the organization is up and running.

Answer: FALSE Explanation: Legal issues that involve such things as patents and copyright searches need to be taken care of before the organization is up and running. How the organization is set up and structured in a large part will determine how the legal issues are addressed.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

7) Once the entrepreneurial organization is up and running, the entrepreneur becomes a manager.

Answer: TRUE Explanation: After all planning and launching activities are over, the entrepreneur must assume the role of manager and start helping to produce the goods or services he or she plans to provide.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 8) An executive summary is the most complete kind of business plan.

Answer: FALSE Explanation: An executive summary is the briefest form of a business plan, typically running no longer than two pages in length.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 9) A context analysis sizes up the target market and evaluates possible competitors to the company.

Answer: FALSE Explanation: An opportunity analysis, not a context analysis, sizes up the target market and evaluates possible competitors to the company. A context analysis gives a broad view of the trends in the entire industry and its place in the economy.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 10) An entrepreneurial venture's advertising strategy would be included in the description of the business section of a full business plan.

Answer: TRUE Explanation: The description of the business would include, among many other things, the advertising strategy that the organization plans to employ when it is operational.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans

11) Since it is impossible to predict the future, projected income estimates are not part of a good business plan.

Answer: FALSE Explanation: Though often difficult to make, income forecasts are, in fact, an important part of a business plan. Even if the estimates turn out to be wrong, they still give planners a baseline to which they can make comparisons.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 12) The two primary factors that affect the legal structure of an entrepreneurial organization are taxes and legal liability.

Answer: TRUE Explanation: The way the organization is structured has a critical effect on how it will be taxed and what liability it will have. Organizations with a lot of assets, and therefore a lot to lose, for example, must be structured differently than those with little to lose.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 13) If the legal structure of an entrepreneurial venture does not turn out to be ideal, it can always be changed easily once the organization is up and running.

Answer: FALSE Explanation: Changing the legal structure of the organization is difficult and timeconsuming, so it is best for the entrepreneur to choose the right structure at the outset.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 14) When they first start out, most small entrepreneurial ventures have a very informal organizational structure.

Answer: TRUE Explanation: In many cases, there is no real structure other than the entrepreneur making all decisions and delegating work only as he or she sees fit.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 15) An entrepreneurial venture that sees its competitive advantage in cost efficiency would tend to adopt an organic style organizational structure.

Answer: FALSE Explanation: A venture that focuses on costs and efficiency would tend to need a more mechanistic, rather than an organic, approach.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

16) Since they are often overwhelmed by the pressure of decisions, one chore that most entrepreneurs never hesitate to delegate is decision making.

Answer: FALSE Explanation: In fact, most entrepreneurs have great difficulty letting go and allowing someone else to make decisions. Letting others make decisions causes the entrepreneur to lose some control over the organization, so the aversion to sharing decision-making power is not unfounded.

Diff: 2 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 17) When hiring, entrepreneurs typically are much less concerned with matching a candidate's values to the organization's organizational culture than traditional HRM managers.

Answer: FALSE Explanation: The opposite is true. Entrepreneurs are much more concerned about getting a good match between a candidate and the organizational culture than traditional HRM managers.

Diff: 2 Learning Outcome: Identify and discuss the components of the human resource management process 18) The classic "entrepreneurial personality" is a person who is high in selfconfidence, motivation, and energy.

Answer: TRUE Explanation: Other well-known traits of entrepreneurs include risk-taking, resourcefulness, persistence, and autonomy.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 19) People with proactive personalities tend to react to their environment more than trying to change their environment.

Answer: FALSE Explanation: The reverse is true. Proactive people tend to take action rather than waiting to react to what happens to them.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 20) You would expect an entrepreneur who has a grand vision for the future to be more of a risk taker than an entrepreneur who is using his or her venture simply as a source of income.

Answer: TRUE Explanation: Entrepreneurs who are seeking ambitious growth tend to be risk takers.

Entrepreneurs who are simply looking to put money in their pockets tend to take fewer risks.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

21) The more proactive you are, the more likely you are to be an entrepreneur.

Answer: TRUE Explanation: People who rate high on proactivity tests are more likely to be entrepreneurs. Proactivity is largely a measure of how strongly a person feels about taking action to solve problems.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 22) Identifying opportunity is not a trait of a person with a proactive personality.

Answer: FALSE Explanation: In proactivity tests such as the example in the chapter, the ability to identify opportunity is listed as a characteristic of a proactive person.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 23) Employee empowerment increases productivity but decreases employee motivation.

Answer: FALSE Explanation: Empowerment increases both productivity and motivation. In fact, productivity typically rises because motivation has risen.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 24) A good way to ease into employee empowerment is to let employees share in decision making.

Answer: TRUE Explanation: Participative decision making allows both bosses and employees to get used to the idea of employees making decisions. After trust has been established, employees can then be empowered to make decisions on their own.

Diff: 2 Learning Outcome: Identify the different types of decisions managers make and discuss how they make decisions 25) Employee empowerment has little effect on an organization's profits or productivity.

Answer: FALSE Explanation: Empowerment, when properly done, has been shown to result in gains in productivity, profits, quality, and employee satisfaction.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

26) The leader of an entrepreneurial organization is like a marching band leader because he or she controls every note that his or her "musicians" play.

Answer: FALSE Explanation: A jazz leader does not control the individual notes of musicians.

Similarly, an entrepreneurial leader should not try to control the individual actions of his or her employees. Instead, he or she should let employees work on their own, seeking only to get the best out of them for the good of the group.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 27) Nonvisionary entrepreneurial leaders usually outperform visionary entrepreneurial leaders.

Answer: FALSE Explanation: The opposite is true. A study shows that visionary companies outperformed nonvisionary companies by a wide margin in both standard financial measurements and stock market performance.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 28) A command-and-control leadership style works best with an entrepreneurial organization that is organized in teams.

Answer: FALSE Explanation: Teams respond much better to a coach-and-collaboration leadership style than a command-and-control leadership style.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 29) One of the keys that distinguishes an entrepreneurial organization from a conventional organization is the concerted emphasis on growth.

Answer: TRUE Explanation: Focus on growth is a distinguishing characteristic for an entrepreneurial venture. If an organization doesn't vigorously pursue growth, it isn't truly entrepreneurial.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 30) The first step in managing a downturn in an entrepreneurial business is to recognize that things are not going well.

Answer: TRUE Explanation: Many entrepreneurs willfully ignore signs of trouble, preferring to redouble their efforts in a positive direction rather than try to remedy problems that are occurring. Thus, the most important step in managing a downturn is recognizing the downturn in the first place.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

31) Selling an entrepreneurial venture is always a sign of failure.

Answer: FALSE Explanation: Exiting a venture and harvesting the profits of the sale can be very lucrative, and not at all a sign of failure.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 32) Because entrepreneurship is so time-consuming and energy-consuming, many entrepreneurs have trouble in their personal lives.

Answer: TRUE Explanation: Running an entrepreneurial venture is often a never-ending enterprise, leaving entrepreneurs with little or no time for family or friends. For this reason, entrepreneurs need to become expert time managers, always being able to find the time for true priorities.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 33) Saving money by avoiding the expense of professional services, such as legal and accounting, is often a mistake for entrepreneurs.

Answer: TRUE Explanation: Entrepreneurs should avoid being penny-wise and pound-foolish. When they need help, they should spend the money for professional services. Good professional advice is often critical to the survival of an entrepreneurial venture.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 34) It is a good idea for an entrepreneur to develop a network of trusted friends and advisors to help with problems and decisions.

Answer: TRUE Explanation: What many entrepreneurs find especially helpful are peers who can say "no" to them. Inside the organization, an entrepreneur often has no one with the power to second-guess his or her judgment. A disinterested peer can be critical without risking his or her job.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

35) An entrepreneurial venture and a small business ________.

A) are superficially similar B) are identical C) have nothing in common D) are impossible to tell apart Answer: A Explanation: A) Entrepreneurial ventures and small businesses are clearly not identical, ruling out "are identical" and "are impossible to tell apart" as correct responses, but they do have a number of characteristics in common, ruling out "have nothing in common" as a correct response. The two are similar on the surface in that they are both small in size (at least initially) and often informally run, making "are superficially similar" the correct response. An entrepreneurial venture focuses much more on being innovative, seeking opportunities, and growth than a small business.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 36) One key difference between an entrepreneurial venture and a small business is that the entrepreneurial venture focuses on ________.

A) productivity B) efficiency C) quality D) innovation Answer: D Explanation: D) Where small businesses typically concentrate on such things as productivity, efficiency, and quality to find their niche in a market, entrepreneurial ventures look to focus on innovation, creating new products or services that don't exist in a market, and, in some cases, creating a new market. This makes "innovation" the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 37) When it was first starting out, the Viking Range company qualified as an entrepreneurial organization because its products were ________.

A) high in quality B) expensive C) innovative and different D) loved by serious cooks Answer: C Explanation: C) The thing that distinguishes an entrepreneurial venture from other ventures is that the entrepreneurial venture is innovative in some way. Producing products that were costly, high in quality, and beloved did not make Viking an entrepreneurial company. Making innovative products did qualify Viking as entrepreneurial, so "innovative" is the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 38) Besides being innovative in some way, a second defining characteristic of an

entrepreneurial venture is that it is ________.

A) small in size B) focused on growth C) dedicated to quality D) original and creative Answer: B Explanation: B) Size and quality have nothing to do with defining an entrepreneurial company. Being original and creative is another way of saying that a company is innovative, so "original" is an incorrect response. Focus on growth is a defining characteristic of an entrepreneurial venture, so "focused on growth" is the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 39) An "accidental entrepreneur" is someone who became an entrepreneur because he or she ________.

A) always had a dream to start a company B) lost his or her job C) identified a great opportunity D) quit his or her job Answer: B Explanation: B) Though accidental entrepreneurs may have always had a dream to start a company and may be good at identifying opportunities, those are not primary reasons why they became entrepreneurs. Instead, they became entrepreneurs because they had lost, rather than quit, their jobs, typically in a corporation. This makes "lost his or her job" the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 40) In the wake of the recent economic downturn, statistics show that entrepreneurship is ________.

A) low B) high C) falling D) neither rising nor falling Answer: B Explanation: B) The lack of jobs in today's economy is probably the cause of the recent increase in entrepreneurship. The Index of Entrepreneurial Activity by the Kauffman Foundation showed that entrepreneurial activity was at its highest level in a decade and a half in 2010.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

41) After four years, ________ business.

A) 56 percent of entrepreneurial ventures are out of B) 56 percent of entrepreneurial ventures are still in C) 31 percent of entrepreneurial ventures are out of D) 63 percent of entrepreneurial ventures are out of Answer: A Explanation: A) After four years, only 44 percent of entrepreneurial ventures remain in business, making "56 percent are out" the correct response and ruling out "56 percent are still in." After two years, 63 percent of the ventures are still in business, not out of business. After seven years, 31 percent of the ventures are still in business, not out of business.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 42) Survival rates of entrepreneurial ventures that started in a recession are ________ those that started in an expansion.

A) somewhat greater than B) less than C) about the same as D) much greater than Answer: C Explanation: C) Surprisingly, it makes no difference when entrepreneurial ventures start. Their survival rates are the same whether they originated during a recession or an expansion, making "about the same as" the correct response and ruling out the other choices.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 43) In most cases, the first step in the initial (pre-planning) phase of the entrepreneurial process is this.

A) pinpointing potential competitive advantages B) identifying potential opportunities C) exploring finance options D) researching the venture's feasibility Answer: B Explanation: B) Without a promising opportunity, there is no reason to embark on a venture in the first place. Thus, the first step in the initial (pre-planning) phase of the entrepreneurial process is to identify a promising potential opportunity in the marketplace, making "identifying potential opportunities" the correct response. The second step is to pinpoint competitive advantages that your approach to developing the opportunity might offer. If you seem to have a real competitive edge, the third step is to see how feasible the venture is by estimating costs and assessing competitors.

The final step of the process, if other things check out, is to explore options for funding.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

44) This is typically the second step in the initial (pre-planning) phase of the entrepreneurial process.

A) researching the venture's feasibility B) identifying potential opportunities C) exploring finance options D) pinpointing potential competitive advantages Answer: D Explanation: D) After a promising potential opportunity in the marketplace has been identified as step one of the process, the second step is to pinpoint competitive advantages that you might have in developing this opportunity, making "pinpointing potential competitive advantages" the correct response. If you seem to have a genuine competitive edge, the third step is to see how feasible the venture is by estimating costs and assessing competitors. The final step of the process, if other things check out, is to explore options for funding.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 45) The third step in the initial (pre-planning) phase of the entrepreneurial process is ________.

A) exploring finance options B) pinpointing potential competitive advantages C) researching the venture's feasibility D) identifying potential opportunities Answer: C Explanation: C) After identifying both a promising potential opportunity in the marketplace and competitive advantages you might have in developing this opportunity, the third step in the initial (pre-planning) phase of the entrepreneurial process involves gauging the feasibility of the project. This may involve estimating costs, assessing competitors, and generally evaluating whether or not the idea is actually realistic, making "researching the venture's feasibility" the correct response.

The final step of the process, if other things check out, is to explore options for funding.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

46) The fourth step in the initial (pre-planning) phase of the entrepreneurial process is ________.

A) exploring finance options B) researching the venture's feasibility C) pinpointing potential competitive advantages D) identifying potential opportunities Answer: A Explanation: A) After identifying both a promising opportunity in the marketplace and competitive advantages you might have in developing this opportunity, the third step in of the process involves gauging the feasibility of the project. Once all of these other steps have passed muster, the final step of the process is to see whether your ideas are fundable. This may involve having discussions with banks and other sources of capital and explaining your plans and qualifications to them.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 47) During the first step of the planning and organizing phase of an entrepreneurial venture, this is accomplished.

A) selecting a legal business organization form B) stating a mission C) selecting an organizational design D) creating a business plan Answer: B Explanation: B) Once the pre-planning phase of developing an entrepreneurial venture is complete, the planning and organizing phase of the project begins. The first step of this process involves identifying a mission for the organization, making "stating a mission" the correct response. The second step involves creating a business plan for the organization. The third step requires the entrepreneur to select an official legal form for the organization to manage tax and liability issues. The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

48) During the second step of the planning and organizing phase of an entrepreneurial venture, an entrepreneur ________.

A) states a mission B) selects a legal business organization form C) creates a business plan D) selects an organizational design Answer: C Explanation: C) The first step of the planning and organizing phase of the entrepreneurial process involves identifying a mission for the organization. The second step involves creating a carefully thought out business plan that details how the organization will operate and who will be involved in its operation, making "creates a business plan" the correct response. The third step requires the entrepreneur to select an official legal form for the organization to manage tax and liability issues.

The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 49) During the third step of the planning and organizing phase of an entrepreneurial venture, an entrepreneur ________.

A) selects an organizational design B) creates a business plan C) states a mission D) selects a legal business organization form Answer: D Explanation: D) The first step of the planning and organizing phase of the entrepreneurial process involves identifying a mission for the organization. The second step involves creating a carefully thought out business plan that details how the organization will operate and who will be involved in its operation. The third step requires the entrepreneur to select an official legal form for the organization to manage tax and liability issues, making "selects a legal business organization form" the correct response. The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

50) During the fourth and final step of the planning and organizing phase of an entrepreneurial venture, this is accomplished.

A) selecting a legal business organization form B) stating a mission C) selecting an organizational design D) creating a business plan Answer: C Explanation: C) The first step of the planning and organizing phase of the entrepreneurial process involves identifying a mission for the organization. The second step involves creating a carefully thought out business plan that details how the organization will operate and who will be involved in its operation. The third step requires the entrepreneur to select an official legal form for the organization to manage tax and liability issues. The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out, making "selecting an organizational design" the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 51) Once an entrepreneurial venture is actually up and running, the entrepreneur switches to a ________ role.

A) managerial B) ceremonial figurehead C) background D) subordinating Answer: A Explanation: A) The initial goal of the entrepreneur is to get the organization functioning. Once that is accomplished, the entrepreneur switches to a managerial role in which he or she functions as CEO, leader, and spokesperson for the organization, making "managerial" the correct response and ruling out all other responses.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

52) This is the simplest and briefest type of business plan.

A) synopsis-type plan B) full business plan C) summary business plan D) executive summary Answer: D Explanation: D) An executive summary is a condensed business plan that is no more than two pages in length that briefly describes how the organization will operate, making "executive summary" the correct response. A synopsis-type plan is a step up from an executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors. A summary business plan includes an executive summary and a brief description of all key components of the venture. A full business plan includes an executive summary and detailed analyses of all of the venture's major components.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 53) This type of business plan is a step up from the simplest type of business plan.

A) summary business plan B) executive summary C) synopsis-type plan D) full business plan Answer: C Explanation: C) An executive summary is the simplest type of business plan and briefly describes how the organization will operate. A synopsis-type plan is a step up from an executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors, making a "synopsis-type plan" the correct response. A summary business plan provides more than a synopsis-type plan and includes an executive summary and a brief description of all key components of the venture. A full business plan is the most complete plan and includes an executive summary and detailed analyses of all of the venture's major components.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans

54) This type of business plan is a step down from the most complete type of business plan.

A) summary business plan B) full business plan C) executive summary D) synopsis-type plan Answer: A Explanation: A) An executive summary is the simplest type of business plan and briefly describes how the organization will operate. A synopsis-type plan is a step up from an executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors. A summary business plan provides more than a synopsis-type plan and includes an executive summary and a brief description of all key components of the venture. A summary plan is one step down from a full business plan, the most complete plan. This makes "summary business plan" the correct response.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 55) This is the most complete and comprehensive type of business plan.

A) executive summary B) full business plan C) summary business plan D) synopsis-type plan Answer: B Explanation: B) A full business plan is the most complete and comprehensive business plan and includes an executive summary and detailed analyses of all of the venture's major components, making "full business plan" the correct response. An executive summary is the simplest type of business plan and briefly describes how the organization will operate. A synopsis-type plan is a step up from an executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors. A summary business plan provides more than a synopsis-type plan and includes an executive summary and a brief description of all key components of the venture.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans

56) A brief mission statement of an entrepreneurial venture would be included in this section of a full business plan.

A) context analysis B) opportunity analysis C) executive summary D) analysis of the context Answer: C Explanation: C) The executive summary, the first part of a full business plan, includes such things as a mission statement and goals and functions like a brief summary of the entire business plan, making "executive summary" the correct response. The opportunity analysis sizes up the market for the venture and assesses the organization's potential competitors. The context analysis gives a broad description of the venture's industry and its place in the general economy. The business description details how the venture will be organized, launched, and managed.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 57) This section of a full business plan would include possible income statements for the next three years.

A) financial data and projections B) executive summary C) analysis of opportunity D) description of the business Answer: A Explanation: A) The financial data and projections section provides estimates of costs, revenue, and cash for the years to come, making "financial data" the correct response. The business description details how the venture will be organized, launched, and managed. The executive summary, the first part of a full business plan, includes such things as a mission statement and functions like a brief summary of the entire business plan. The opportunity analysis sizes up the market for the venture and assesses the organization's potential competitors.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans

58) Identification of the organization's key personnel would be included in this section of a full business plan.

A) analysis of the context B) analysis of opportunity C) description of the business D) executive summary Answer: C Explanation: C) The business description details how the venture will be organized, launched, and managed. It would include such details as identification of key personnel, making "description of the business" the correct response. The executive summary, the first part of a full business plan, includes such things as a mission statement and functions like a brief summary of the entire business plan. The opportunity analysis sizes up the market for the venture and assesses the organization's potential competitors. The context analysis gives a broad description of the venture's industry and its place in the general economy.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 59) This section of a full business plan would include a description of the demographics of the target market for the organization.

A) description of the business B) financial data and projections C) executive summary D) analysis of opportunity Answer: D Explanation: D) The opportunity analysis sizes up the market for the venture and assesses the organization's potential competitors. It also describes the target market for the organization in detail, making "analysis of opportunity" the correct response.

The financial data and projections section provides estimates of costs, revenue, and cash for the years to come. The business description details how the venture will be organized, launched, and managed. The executive summary, the first part of a full business plan, includes such things as a mission statement and functions like a brief summary of the entire business plan.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans

60) This section of a full business plan would include an assessment of the industry of the venture and how it fits into the overall economic climate.

A) analysis of context B) description of the business C) financial data and projections D) analysis of opportunity Answer: A Explanation: A) The context analysis gives a broad description of the entire business context of the venture—how the venture is situated within its industry and how that industry fits into the larger general economy. This makes "analysis of context" the correct response. The financial data and projections section provides estimates of costs, revenue, and cash for the years to come. The business description details how the venture will be organized, launched, and managed. The opportunity analysis sizes up the market for the venture and assesses the organization's potential competitors.

Diff: 2 Learning Outcome: Discuss the processes and tools of developing different types of plans 61) The form of legal ownership that an entrepreneur chooses for a venture primarily affects these concerns.

A) profit and productivity B) taxes and liability C) liability and planning D) taxes and revenue Answer: B Explanation: B) The form of legal ownership determines liability issues (who will be held responsible in the event that the organization gets involved in lawsuits or other legal issues) and tax issues (how the organization will be considered by the IRS). This makes "taxes and liability" the correct response and eliminates all other responses.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 62) Entrepreneurs should take great care when choosing a form of legal ownership because once one form is chosen, it is ________ to change it to another form.

A) impossible B) very difficult C) easy D) rather embarrassing Answer: B Explanation: B) The reason entrepreneurs want to get their legal ownership form right the first time is not because it is embarrassing or impossible to change to another form but that it is difficult and can be costly, making "very difficult" the correct response. Note that "easy" is wrong because being easy-to-change forms would not be a barrier to making a change.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 63) Which of the following is NOT a way to organize an entrepreneurial venture?

A) partnership B) corporation C) cooperative association D) sole proprietorship Answer: C Explanation: C) Partnerships, corporations, and sole proprietorships are all recognized legal forms for an entrepreneurial venture. A cooperative association may be an informal term for a venture, but it is not a recognized legal term, so this choice is the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 64) Many small entrepreneurial firms don't have a deliberately planned organizational structure because ________.

A) they are inefficient B) small firms never need structure C) the IRS prevents them from having a structure D) one person does "everything" Answer: D Explanation: D) In most cases, small firms are not inefficient and they do require some kind of structure, though it may be a highly informal structure. The reason small firms tend to not have a deliberate structure is that one person (or a few people) tends to take care of all issues for the organization, making such structural categories as departmentalization unnecessary. This makes "one person does 'everything'" the correct response. Note "the IRS prevents them from having a structure" is ruled out because the IRS has little or no influence on organizational structure.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 65) In general, an entrepreneurial venture that sees ________ as its competitive advantage would tend to be ________ in structure.

A) efficiency; organic B) efficiency; mechanistic C) innovation; mechanistic D) innovation: formal Answer: B Explanation: B) The more efficiency-oriented an organization is, the less organic and the more formal and mechanistic it is likely to be, making "efficiency; mechanistic" the correct response. An innovative organization would tend to be organic, not mechanistic, and informal, not formal.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

66) In general, an entrepreneurial venture that sees ________ as its competitive advantage would tend to be ________ in structure.

A) efficiency; organic B) efficiency; informal C) innovation; mechanistic D) innovation: informal Answer: D Explanation: D) The more innovation-oriented an organization is, the less mechanistic and the more informal and organic it is likely to be, making "innovation; informal" the correct response. An efficiency-oriented organization would tend to be mechanistic, not organic, and formal, not informal.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 67) An entrepreneurial venture that manufactures low-cost generic pills would be likely to be ________.

A) very organic in structure B) very innovative C) fairly mechanistic in structure D) very informal in structure Answer: C Explanation: C) The venture described sees opportunity in efficiency and costcontrol, not innovation. This emphasis on costs would tend to make the organization more mechanistic than organic or informal, making "fairly mechanistic" the correct response. Organizations that rely on innovation tend to be organic, while those that make standardized products and rely on efficiency tend to be more mechanistic.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 68) An entrepreneurial venture whose goal is to create humorous video games would be likely to be ________.

A) very organic in structure B) highly centralized C) fairly mechanistic in structure D) very mechanist in structure Answer: A Explanation: A) Organizations that rely on innovation tend to be organic, while those that make standardized products and rely on efficiency tend to be more mechanistic.

This organization clearly strives to be creative and innovative, so it would tend to have an organic structure, which would rule out being centralized or mechanistic. The correct response, therefore, is "very organic in structure."

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 69) When hiring, entrepreneurs are more likely to make sure that these two elements are a good match than traditional HRM managers.

A) job skills and organizational needs

B) job qualifications and organizational requirements C) formal job training and organizational requirements D) values and organizational culture Answer: D Explanation: D) Though a good match between job skills, job qualifications, and job training and organizational needs are certainly important to an entrepreneurial organization, they are no more important to an entrepreneur when hiring than to a traditional HRM manager. What entrepreneurs typically do find more important is a match between the organization's culture and the attitudes and values of the person being hired, making "values and organizational culture" the correct response.

Diff: 2 Learning Outcome: Identify and discuss the components of the human resource management process 70) Job candidates are more likely to hear about ________ at an entrepreneurial organization than they would at conventional organizations.

A) benefits B) monetary compensation C) advancement through the ranks D) learning opportunities Answer: D Explanation: D) Conventional organizations are likely to mention conventional job features at a job interview, such as benefits, advancement, and compensation. In an entrepreneurial organization, one is much more likely to hear about the intangible, psychological benefits of working for the firm that include such things as learning opportunities, making "learning opportunities" the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

71) Which of the following statements regarding an "entrepreneurial personality" is true?

A) Finding a set of personality traits for an entrepreneurial personality is much easier than for leaders.

B) Finding a set of personality traits for an entrepreneurial personality is more difficult than for leaders.

C) There is no specific set of personality traits that all entrepreneurs share.

D) There has been no research on this topic to date.

Answer: C Explanation: C) Although trying to pinpoint specific personality characteristics that all entrepreneurs share has the same problem as identifying the trait theories of leadership—that is, being able to identify specific personality traits that all entrepreneurs share—this hasn't stopped entrepreneurship researchers from listing common traits.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 72) Which of the following terms does not fit the classic profile of the successful entrepreneur?

A) high energy B) reflective C) persistent D) resourceful Answer: B Explanation: B) Successful entrepreneurs tend to be high-energy individuals who tenaciously persist in finding the solution to a difficult problem and are skilled in finding ways to get things done when they seem impossible. One trait that entrepreneurs do not tend to have in abundance is a reflective, contemplative nature— they tend to be doers, not individuals who dither and mull things over. This makes "reflective" the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 73) In general, entrepreneurs tend to ________ more than the average person.

A) cut corners B) take risks C) avoid risks D) avoid cutting corners Answer: B Explanation: B) Cutting corners or avoiding the cutting of corners in most cases has little to do with how entrepreneurial a person is. If anything, entrepreneurs are probably less likely to cut corners than others because they realize that cutting corners could in some instances jeopardize their ambitions. What does correlate with the entrepreneurial personality is risk-taking. Entrepreneurs tend to be risk takers, making "take risks" the correct response and ruling out "avoid risks" as a correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

74) A person with a proactive personality is someone who ________.

A) takes action B) avoids taking action C) is entrepreneurial D) is not entrepreneurial Answer: A Explanation: A) A proactive person is someone who tends to take action to influence his or her environment, making "takes action" the correct response and ruling out "avoids taking action." Though entrepreneurs tend to be proactive people, a proactive person is not necessarily entrepreneurial, so both of the remaining choices can be ruled out.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 75) People who become entrepreneurs often have ________.

A) family money B) no family money C) family members who are entrepreneurs D) no family members who are entrepreneurs Answer: C Explanation: C) Though a source of money can be helpful to an entrepreneur, family money is not recognized as an indicator for entrepreneurship, so both choices regarding family money can be eliminated as correct responses. Entrepreneurs often do come from families that have other entrepreneurs in them, especially parents, making "family members who are entrepreneurs" the correct response and ruling out "no family members who are entrepreneurs."

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 76) Perhaps the best predictor of whether or not a person will become an entrepreneur is how ________ she is.

A) proactive B) talented C) likeable D) desperate Answer: A Explanation: A) Though recent job losses have caused many somewhat desperate individuals to become entrepreneurs, that cause is still overshadowed in importance by how proactive a person is, making "proactive" the correct response. Being likeable and talented also can be helpful to entrepreneurs, but those traits are not as important as how proactive a person is.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

77) The key to the proactive personality is that a proactive person feels that he or she can ________ any environment.

A) adapt to B) change C) be successful in D) be well liked in Answer: B Explanation: B) The defining characteristic of a proactive person is not how successful or well-liked he or she is. What defines proactivity is not being satisfied with the status quo. Rather than adapt to unsatisfactory conditions, proactive people instead will try to initiate some kind of change to make the environment suit their needs. All of these factors combined indicate that "change" is the correct response for this question. A proactive person is a person who will not hesitate to change his or her environment.

Diff: 3 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 78) A proactive person would be most likely to say this about his or her life.

A) I feel trapped.

B) If I don't like something, I fix it.

C) If I don't like something, I learn to live with it.

D) I like to leave well enough alone.

Answer: B Explanation: B) Proactive people rarely feel trapped for long or learn to live with conditions they don't like. Instead of leaving well enough alone, proactive people do the opposite: they upset the apple cart and change things if the situation isn't to their liking. This means that wanting to fix things best describes a proactive person, making fixing things one doesn't like the correct response.

Diff: 3 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 79) With respect to entrepreneurship, a proactive person is best described as someone who has skill in identifying ________.

A) a problem B) trouble C) a good idea D) a good opportunity Answer: D Explanation: D) Though a proactive person would not be bad at recognizing problems, trouble, and good ideas, a truly defining characteristic of a proactive person is the ability to recognize a good opportunity, making "good opportunity" the correct response. Recognizing opportunities is what typically compels proactive people to act, and action is their most defining characteristic.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 80) In general, employee empowerment ________ motivation in employees.

A) increases B) slightly decreases C) strongly decreases D) has no effect on Answer: A Explanation: A) Empowerment gives employees a greater sense of "ownership" in what they do, so it tends to increase such things as motivation, effort, and job satisfaction. This makes "increases" the correct response and eliminates the other choices.

Diff: 2 Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization 81) The typical reason for why an entrepreneur considers implementing employee empowerment in an organization is to make sure that the organization ________.

A) stays nimble and flexible B) is profitable C) stays small and informal D) is efficient Answer: A Explanation: A) Though employee empowerment can help an organization be efficient and profitable, those are not the primary reasons for delegating authority.

Entrepreneurs delegate authority to keep their organizations nimble and flexible, making "stays nimble and flexible" the correct response. Note that "stays small and informal" is incorrect because no amount of delegation can keep an organization small if it is in the process of expanding.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 82) Entrepreneurs who have trouble delegating authority should go through the process of empowering employees in this manner.

A) gradually B) all at once C) using a rigid timetable D) hastily Answer: A Explanation: A) When entrepreneurs are hesitant with respect to empowering employees, they should go about the process slowly and gradually rather than all at once or hastily. Timetables may help, but they could also damage the process if employees get impatient or the employer feels that the process is going too fast, so "using a rigid timetable" is an incorrect response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

83) The best way for a hesitant entrepreneur to begin the process of employee empowerment is to ________.

A) give employees complete decision-making power immediately B) use participative decision making C) let the employees decide how much decision-making power they will have D) order employees to start making decisions Answer: B Explanation: B) The best response is "use participative decision making." Opening up the decision-making process allows both the entrepreneur and the employees to see how each other thinks and solves problems. More importantly, participative decision making is gradual and builds trust. Once both the entrepreneur and the employees feel that the employees are ready to make decisions on their own, more decision-making power can be delegated. Note that all other choices in this question are either arbitrary and/or too abrupt so they are designated as incorrect responses.

Diff: 2 Learning Outcome: Summarize the basic characteristics of major leadership theories 84) A leader of an entrepreneurial organization is like a jazz band leader because he or she ________.

A) controls every "note" that the performers "play" B) wants a happy and harmonious workplace C) has no influence over what the performers "play" D) works to draw the "best" out of every performer Answer: D Explanation: D) In a jazz band, the leader can't control every note that the performers play, but he or she does have considerable influence over their performance.

Ultimately, the job of jazz-leader-type entrepreneur is to guide his or her performers, give them problems to solve, and create a situation in which they can perform at their very best. This makes "works to draw the 'best' out of every performer" the correct response. "Wants a happy workplace" is ruled out because a happy and harmonious workplace is usually not a primary goal for an entrepreneurial manager.

Diff: 2 AACSB: Communication abilities Learning Outcome: Summarize the basic characteristics of major leadership theories

85) An entrepreneur's ability to be visionary is important because visionary companies tend to ________.

A) have employees who are satisfied with their jobs B) be larger than nonvisionary companies C) be more successful than nonvisionary companies D) be more organic than nonvisionary companies Answer: C Explanation: C) The primary reason why an attractive vision is important for an entrepreneurial company is that visionary companies outperform nonvisionary companies by a wide margin, making "be more successful" the correct response. The size or structure of an organization does not necessarily affect its success, ruling out "be larger" and "be more organic" as correct responses. Though it may be true that employees in visionary companies are likely to be satisfied with their jobs, there is no evidence to support this assertion.

Diff: 2 AACSB: Communication abilities Learning Outcome: Summarize the basic characteristics of major leadership theories 86) This type of work team has the most autonomy.

A) cross-functional B) problem solving C) self-directed D) virtual Answer: C Explanation: C) A self-directed team is the most empowered team and has the most autonomy of any of the team structures that are common in entrepreneurial ventures, making "self-directed" the correct response. A cross-functional team has individuals who have various special skills who work together. A problem-solving team is a team selected out of a single department that is put together exclusively to work on a specific problem. A virtual team works using communication technology and is not necessarily granted more or less autonomy than other types of teams.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

87) This type of work team has authority to implement the changes it recommends.

A) empowered B) cross-functional C) problem solving D) self-directed Answer: A Explanation: A) An empowered team has the authority to identify improvements that should be made in a work activity and implement those improvements if it decides they are necessary, making "empowered" the correct response. A cross-functional team has individuals who have various special skills who work together. A problemsolving team is a team selected out of a single department that is put together to work exclusively on a specific problem. A self-directed team is the most empowered team and has the most autonomy of any of the team structures that are common in entrepreneurial ventures.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 88) This type of work team is composed of specialists.

A) empowered B) problem solving C) self-directed D) cross-functional Answer: D Explanation: D) A cross-functional team has individuals who have various special skills who work together, making "cross-functional" the correct response. A problemsolving team is a team selected out of a single department that is put together to work exclusively on a specific problem. An empowered team has the authority to identify improvements that should be made in a work activity and implement those improvements if it decides they are necessary. A self-directed team has the most autonomy of any of the team structures that are common in entrepreneurial ventures.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

89) An entrepreneur should ________ a plan for dealing with an economic downturn ________ any downturn occurs.

A) create; when B) have; in place before C) write out; after D) think out; while Answer: B Explanation: B) When it comes to downturns, it is best for the entrepreneur to have a plan in place before the downturn occurs, not to try to deal with the crisis while it is occurring or after it has occurred. This makes "have; in place before" the correct response. Planning for downturns is much like planning exit routes for a building in case of a fire. Once the downturn occurs, it is too late to try to think about it in an unemotional, analytic way.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 90) Harvesting an entrepreneurial venture occurs when the venture ________.

A) has a hit product B) is successful C) is sold D) becomes profitable Answer: C Explanation: C) Having success, being profitable, and having a hit product can all make a venture attractive to buyers. An entrepreneur is able to harvest the venture when it can be sold to a buyer.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 91) To avoid problems in their personal lives, entrepreneurs need to become excellent time managers and deal with conflicts ________ they arise.

A) shortly before B) as C) well after D) long before Answer: B Explanation: B) The key to handling conflicts is not to put them off. When a conflict, such as a personal or family problem, arises, an entrepreneur should not bury him- or herself in work and try to ignore it. Instead, he or she should deal with it directly as it arises, making "as" the correct response. Dealing with a conflict before it arises is somewhat impossible in most cases, so both shortly before and long before can be ruled out. Dealing with a conflict after it arises is usually too late.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

92) This is one of the best ways for entrepreneurs to deal with especially difficult work-related or personal problems.

A) read self-help books B) consult trusted employees C) develop a network of trusted peers D) consult relatives and family members Answer: C Explanation: C) Though reading self-help books and consulting with family members might be helpful, both options are flawed. Books provide no live feedback and family member consultations can get emotionally overheated. Consulting employees is a downright bad idea because it may compromise information that you don't want to be revealed to the organization. The best option for this question is to develop a network of friends and peers who can look at problems objectively and give advice freely, making "develop a network of trusted peers" the correct response.

Diff: 2 Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 93) In a short essay, explain what an entrepreneurial venture is and how it differs from a small business.

Answer: An entrepreneurial venture is a business that focuses on innovation and growth. Entrepreneurial ventures typically originate because an entrepreneur sees an opportunity in the market and has a vision for how that opportunity can be exploited.

In an entrepreneurial venture, this exploitation of the opportunity is accomplished in some innovative way—with an innovative product or service, method of providing that product or service, or both.

A small business, on the other hand, is an organization that seeks to make a profit but is not particularly innovative or looking for growth. Growth is the final characteristic of an entrepreneurial venture. Though it may start small, the venture is always looking for its innovative edge to create a "home run" product, causing it to experience dramatic growth.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 94) In a short essay, explain why Viking Range qualifies as an entrepreneurial venture.

Answer: Viking Range has all the earmarks of an entrepreneurial venture—vision, opportunity, innovation, and growth. Viking Range began with the vision of a single man, Fred Carl Jr. Carl was taking advantage of an opportunity in the market that he saw for sales of super high-quality appliances. Carl's products were highly innovative.

Finally, Carl's company experienced dramatic growth. It has grown from a tiny company to an organization that now has annual sales of about $300 million.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

95) In a short essay, describe the steps an entrepreneur typically takes in deciding whether to begin an entrepreneurial venture.

Answer: First, the entrepreneur needs to identify a promising opportunity in the marketplace. Second, the entrepreneur needs to imagine how he or she will exploit that opportunity, identifying competitive advantages that his or her approach would provide. Next, the entrepreneur would spend time gauging the feasibility of the project—estimating costs, looking at competitors, seeing if the idea would really work in the real world. Finally, the entrepreneur would look into funding the project. If that looked good, the entrepreneur would enter into planning and organizing the actual venture.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 96) In a short essay, describe the steps an entrepreneur typically takes in planning and organizing an entrepreneurial venture.

Answer: In planning an entrepreneurial venture, an entrepreneur would first develop an organizational mission. Next, he or she would spend time creating a detailed business plan for the venture. This would include details of how the organization would actually run. After the business plan was complete, the entrepreneur would focus on two types of organization. First, the entrepreneur would determine what kind of legal form the organization would have. This would help the organization deal with tax and liability issues. Finally, the entrepreneur would work on organizing the actual organizational structure of his or her new company.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Discuss the processes and tools of developing different types of plans 97) In a short essay, describe the contents of the executive summary part of a full business plan.

Answer: An executive summary is sort of a mini-version of a full business plan. An executive summary contains an abbreviated version of the organization's mission statement, the goals of the venture, and a brief description of the products or services that the organization would provide. An executive summary should describe the competitive advantages that the entrepreneur envisions for the organization as well as identify its niche in the current marketplace. The summary might also have profiles of competitors and some brief information on the finances of the venture.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Discuss the processes and tools of developing different types of plans

98) In a short essay, describe the contents of the business description part of a full business plan.

Answer: A business description describes how an entrepreneurial venture will be organized, launched, and managed. A business description contains a complete mission statement and host of details about how the organization's work will proceed.

This includes information about costs, pricing, scheduling, risks, marketing, advertising, operational work plans, facilities, equipment, staffing, and benefits and costs for employees.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Discuss the processes and tools of developing different types of plans 99) In a short essay, describe the factors that determine whether an entrepreneurial venture will be mechanistic or organic in structure.

Answer: The more efficiency- and cost-oriented an organization is, the more likely it will have a mechanistic structure. Mechanistic structures work well when the organization is producing a fairly simple, standardized product and not focusing on custom products or innovation.

An organic structure works better when the organization is focused on being creative and making unique, innovative products. An innovative organization needs the freedom that a less centralized, less formal, more organic structure provides.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 100) In a short essay, describe the classic entrepreneurial personality.

Answer: The typical successful entrepreneur is a confident, motivated, high-energy individual. He or she likes to solve problems and won't give up on them until he or she finds the solution. This person is resourceful, self-directed, and likes to take risks.

Finally, the typical entrepreneur has a proactive personality. That is, rather than adapt to an unsatisfactory status quo, she will take action and try to change things for the better.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship

101) In a short essay, explain what a proactive personality is and what its connection is to entrepreneurship.

Answer: A person with a proactive personality will see a problem and act on it.

Rather than be a victim of circumstances, a proactive person likes to take action to change those circumstances. Proactivity is a lot like being dynamic. Dynamic however, refers primarily to an individual who likes to be in motion. A proactive person, on the other hand, is not only in motion, the goal of his or her motion is to change something in the environment.

Proactivity is important in entrepreneurship because it is an excellent predictor of who will be an entrepreneur. People with high proactivity scores tend to make good entrepreneurs.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 102) In a short essay, explain how entrepreneurial you think you are.

Answer: Sample response: I think I am a fairly entrepreneurial person. Using the proactivity quiz in the chapter reading, I scored a 96, which puts me above the level of 85 that identifies highly proactive people.

My main entrepreneurial strength, as I see it, is my ability to spot marketplace opportunities. I am always noticing some product or service that "needs" to be invented. For example, I currently see lots of opportunity in the soft drink market as people turn away from sugary (or artificially sweetened) drinks and move toward things like seltzer.

Diff: 3 AACSB: Reflective thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 103) In a short essay, describe a good way for an entrepreneur to motivate his or her employees.

Answer: Though entrepreneurs typically find it difficult to give up control and decision-making power, the best thing they can do is to empower employees. When given decision-making power, employees typically perform at a higher level, are more motivated, and more satisfied with their jobs.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Summarize the major theories of motivation and discuss factors that can affect motivation within an organization

104) In a short essay, describe how an entrepreneur who is reluctant to empower employees might go about the process.

Answer: If the entrepreneur has trouble delegating authority, it is a good idea to use participative decision making as a stepping-stone to empowerment. By making decisions together, the entrepreneur and the employees can build trust in one another.

Once both the entrepreneur and the employees feel that the employees are ready to make decisions on their own, more decision-making power can be delegated.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Describe the entrepreneurship process and identify opportunities for different types of entrepreneurship 105) In a short essay, describe how an entrepreneur is like a jazz band leader.

Answer: In a jazz band, the leader doesn't attempt to control every note that the performers play. Instead, the leader tries to get the best performers possible and put them in the best situation possible to perform.

A similar thing occurs with an entrepreneur who is looking to have employees who are creative and innovative. The entrepreneur can't try to orchestrate every move they make. Instead, the entrepreneur should simply put them in the best working situation possible, give them good problems to solve, and let them use their talents and skills to solve those problems.

Like a jazz band leader, the ultimate goal of an entrepreneur is to get employees to perform at the highest possible level. If he or she can get them to do this, then he or she has been successful.

Diff: 3 AACSB: Analytic thinking Learning Outcome: Summarize the basic characteristics of major leadership theories